An example of aid being effective is seen in Freetown, Sierra Leone. The aid provided by World Bank has been used to support Reducing Administrative Barriers to Investment (RABI) schemes. This scheme cuts down the ‘red tape’ and supports the creation of ‘one-stop shops’ which makes it less difficult and expensive to start a business. Between 2005 and 2007, 1800 new companies were set up in Sierra Leone. In 2010, 4500 new companies were registered, contributing to creation of 15800 extra jobs across the country.
Another example is the aid donated by the UK in order to help Haiti cope with the earthquake from 2010. The UK government gave £200 million in emergency support which included funding to directly help more than 380,000 people get access to food, clean water and medical care. The British public also donated 101 million to the Disasters Emergency Committee Appeal for Haiti, to support one of the largest humanitarian responses. The British government also funded medical professionals to set up 16 major cholera treatment centers as by October 2011, cholera had broke out in Haiti. These actions are considered effective as they will help Haiti in the long run and they focus on developing the country by donating in the form of goods.
Aid can also be ineffective if it is used to fund projects that don’t help the long term development of a country. A constant supply of aid can cause dependency on the poorer country. Emergency aid, which is a type of short-term aid, is also ineffective as it does not solve the long –term economic development problems of a country. All these reasons don’t help reduce disparities as the poor country isn’t able to be independent and the issues within the country are not being solved. Ineffective aid usually focuses on the present, rather than the future of the country.
An example of ineffective aid is The Pergua Dam which is located along the river Pergau in the northern part of Sumatra in Malaysia. Tied aid is funded for this project; Malaysian government agreed a huge arms contract with the British Government, while they supplied military aircraft. This project is seen as ineffective as it didn’t directly help the poor people, but only causes environmental and problems. For example, the Dam is seen as unsustainable because to create the reservoirs, large areas of rainforests have to be destroyed, causing deforestation. Roads also had to be built for electricity pylons which further causes environmental destruction. The electricity produced by the Dam will not benefit the poorest people as it will go the core city, Kuala Lumpur.
In conclusion, the impacts of aid should be evaluated to see whether they are effective and can help reduce disparities. Aid should be given as long as it helps develop the country, through long-term projects and improve the standard of living of the people, as seen in Sierra Leone and Haiti. The aid provided must avoid increasing debt for the country and exploitation of physical and human resources and should result to long-term benefits, unlike the Pergau Dam.
