There are many ways to aid economically developing nations. Over the last few years, “aid has added around one percentage point to the annual growth rate of the bottom billion.” One percentage point has made the difference between “stagnation and severe cumulative decline.” Aid can make progress towards reducing poverty worldwide. I think the most effective way a country can develop, though it is controversial, is through private sectors– that is through the emergence of private firms in a developing country, even though there is a chance of exploitation. Not only does it create jobs, but individuals actually get paid, despite how low it may sound to us. The exchange of ideas and technology these new firms bring will also innovate the local area and will leave room for growth and technological advancements. Finally, if there is an abounding, flourishing ecosystem, more companies will enter the scene, allowing the country in the long run to economically develop. It will also diversify the different sectors of a nation, shifting the focus from an economy focused on one sector. Of course, there are also other ways of aid, like from NGO’s and ministries, but I think the entrance of private firms is the most effective way; there is also minimum room for government corruption. Aid is without criticism however: it is looked down upon as sometimes it is questioned where the money actually goes, especially in corrupt countries with irresponsible governments. Here are some tips by the Overseas Development Institute to combat corruption, should there be a case:
- Resist the pressure to spend aid rapidly.
- Continue to invest in audit capacity, beyond simple paper trails;
- Establish and verify the effectiveness of complaints mechanisms, paying close attention to local power structures, security and cultural factors hindering complaints;
- Clearly explain the processes during the targeting and registration stages, highlighting points such as the fact that people should not make payments to be included, photocopy and read aloud any lists prepared by leaders or committees.
