331\. What is Foreign Aid? (English Vocabulary Lesson)
26:59 Share

Imagine what's possible when learning doesn't get in the way of life. At Capella University, our game-changing FlexPath learning format lets you set your own deadlines so you can learn at a time and pace that works for you. It's an education you can tailor to your schedule. That means you don't have to put your life on hold to pursue your professional goals. Instead, enjoy learning your way and earn your degree without missing a beat. A different future is closer than you think with Capella University. Learn more at capella.edu.

Hello, I'm Tom Wilkinson and welcome to the Thinking in English podcast, a podcast for intermediate to advanced level English learners. What is foreign aid? What are the different types of aid? Why do countries give or loan money to other countries? And why is this such a controversial thing?

Today we're going to discuss all of these questions and think in depth about foreign aid, as well as learning some new vocabulary.

You can find a full transcript for this episode for free on Spotify, Apple and on my blog. Patreon subscribers can also access ad-free episodes with no sponsors or commercials. Exclusive to my Patreon subscribers. Link in the description. Here is today's vocabulary list. Aid. Aid.

Assistance, usually in the form of money, resources or services given to help people or countries in need. For example, governments often provide aid to nations affected by natural disasters. Humanitarian, humanitarian. Relating to helping people and improving human welfare, especially in crises.

as in several humanitarian organisations sent food and medical supplies to the war-torn region. Grant. Grant. Money given for a specific purpose, usually by a government or organisation, that does not need to be repaid. For example, the university received a grant to fund new research on renewable energy. Loan. Loan.

Money borrowed that must be repaid, often with interest. For example, she took out a loan to pay for her education. Debt. Debt. Money owed to another person, company or institution. For example, many countries struggle to repay their national debt. Diplomacy. Diplomacy.

the practice of managing international relations through negotiation and discussion. As in, successful diplomacy helped prevent the conflict from escalating into war. Recently, overseas and foreign aid has been all over the news. The USA and other countries have been cutting their aid budgets and reducing the amount of money given out to other countries.

Donald Trump and Elon Musk have announced plans to cut over 90% of USAID's foreign aid contracts. This will eliminate $60 billion in global assistance. They have now stopped thousands of development and humanitarian programs and have fired thousands of US government employees working in aid and development.

While the USA has been particularly extreme, other countries have also started questioning and cutting aid. A few weeks ago, the UK Prime Minister, Keir Starmer, announced the largest cut to UK overseas aid in history, reducing it from 0.5% to 0.3% of national income. Today, I want to take a look at aid.

We'll define it, discuss its purposes and benefits, its history and its controversies. Foreign aid, international aid or overseas aid has been a key part of international politics and relations for decades.

At a basic level, international aid refers to the financial, technical or material assistance provided by one country or organisation to another. It is typically aimed at supporting economic development, improving living standards or addressing humanitarian crises.

governments, international institutions like the United Nations or the World Bank, and private organisations are all involved in foreign aid. I think it is quite common for people to associate aid with charity, thinking of it like a donation, giving money away. But it's more complex than this.

Aid is not simply a one-sided donation, and there are many different types of aid. For example, there is bilateral aid. Bilateral aid is direct assistance from one country's government to another. An example of this would be the UK providing funding to Kenya for infrastructure projects.

The alternative to bilateral aid is multilateral aid. This is aid that is given through international organisations like the World Bank. It means multiple countries, multiple organisations funding the aid. You also have further and more specific types of aid.

Humanitarian aid is the emergency relief given in response to natural disasters or public health crises in emergency situations. When Haiti had its massive earthquake, the world sent food and medical supplies as humanitarian aid.

I think humanitarian aid is the most understandable and most obvious type of aid. But it is not the most common. Probably not the most common. Development aid often takes up a lot of a country's aid budget. Development aid is long-term assistance aimed at improving something in a country. This could be developing that country's economy.

modernising healthcare or building large infrastructure projects. Tide aid is also very common as well and very controversial. This is aid that comes with conditions.

Usually, these conditions are to use the aid to buy things from the donor country. For example, the EU might give a country some money to develop their farming industry, but because it's tied aid, that country is required to buy all of their equipment from EU countries. Or China may fund the construction of a massive dam in Africa.

but because it's tied aid, that African country has to hire Chinese companies for the construction. And then there is also military aid. This is when one country gives weapons, training or funding to strengthen another country's military. Foreign aid is usually given out in one of three ways. As a grant,

So this is like a donation. The money doesn't need to be returned or repaid. As a loan. So the money needs to be repaid eventually and often comes with interest. Or as technical assistance. So rather than giving actual money or resources, a country may be given training or technology or expertise to help their development.

Now we've discussed what foreign aid is, what's its purpose? I studied international relations for a long time and something you quickly realise is that most countries and governments are selfish. Even if they do something nice, there is usually a reason behind it. On the surface, the goals of foreign aid can be broadly categorised into four main objectives.

First, the primary aim of foreign aid is to help reduce poverty and improve the quality of life in poorer countries. For example, providing clean water or improving education. Foreign aid has funded schools across the world, provided scholarships and helped to eradicate diseases like smallpox that have killed millions of people.

Second, foreign aid is often used to improve economic development. The EU might fund the construction of a large bridge. This provides jobs and opportunities in that country, as well as giving the country a bridge.

Another example is Japan's ODA, Official Development Assistance, has helped to build railways, highways and ports across Asia, boosting economic connectivity. Third, aid is often given during urgent crises like war, famine, natural disasters and health crises.

After the 2010 Haiti earthquake, billions of dollars in aid were used for emergency response, rebuilding efforts and healthcare assistance. This is one of the most immediate and impactful uses of aid. And fourth, another official reason for giving foreign aid is to strengthen diplomatic and economic relationships. It can help create good relationships between countries.

All of these uses of aid are, in my opinion, beneficial. However, I think there are also unspoken motivations behind giving aid. Over the past several days, three females have been found dead. Looks like someone's going after these girls. Then they have to know to watch their backs.

Streaming March 13th. You really want what happened to this woman to happen to you? Exactly why I need to keep going on this. Starring Emmy Award winner Amanda Seyfried. I'm worried about what you're going to find. So am I. Long Bright River. A limited series. Streaming March 13th. Only on Peacock.

Here's your report. Thanks, Jane. I wish I could hire a whole team of yous. Try posting a job on LinkedIn. It's the world's largest professional network. Unlike resumes, LinkedIn gives a real-time view into a candidate's skills, experiences, and more. Let's do it. You're irreplaceable, Jane, but another you would be great. Find your perfect match with LinkedIn. Post your free job at linkedin.com slash achieve. That's linkedin.com slash achieve. Terms and conditions apply.

International aid gives countries international power and influence. By giving out money or resources, that country is building their power and their reputation. Foreign aid can be used to gain favour of leaders in important regions and open up opportunities for that country. Tide aid also promotes trade and investment for the country giving them money.

Most aid is not necessarily charitable. Imagine I gave you all $10, but that $10 was in the form of a gift voucher for one of my sponsors. You would need to spend that money on one of the companies that is connected to me, which benefits me in the long term. This is the same principle as Tide Aid.

In 2018, about 40% of US aid and over 20% of Japanese aid, so traditionally the two biggest aid givers, was tied. In that year, Japan gave India $2 billion for the construction of a high-speed rail network. The condition was that India uses Japanese companies and technology for the construction.

Tide aid is really good for the country giving the resources or aid. In fact, it is often better for the giving country. Japan gives $2 billion to India. India spends that $2 billion on Japanese companies, giving Japanese people jobs and buying products from Japanese companies and boosting the Japanese economy.

It's perhaps better for Japan than India because India might have found a cheaper deal. China may have been able to build the railway for cheaper, but India could only spend that money on Japanese companies. And then obviously, military aid can serve a country's own interests. The United States has traditionally given aid and assistance to places like Western Europe, Japan, Korea, Israel and Saudi Arabia.

Why? Well, to strengthen their own interests and their own influence in the areas they consider important. I think it would be useful to briefly consider the history of foreign aid. While there are examples before 1945, aid became a real and significant part of global society after World War II. The United States launched the Marshall Plan in 1948.

The Marshall Plan was a massive aid program that provided over $13 billion, so it's worth a lot more today, to Western European countries. The aim was to rebuild countries and stabilize European economies. The Marshall Plan is a big part of the recovery of France, Germany and Italy from war.

Without the support of the USA, these countries would not have been able to rebuild. More importantly for the US, they saw aid as a way to prevent the spread of communism. In fact, during the Cold War, the ideological battle between communism and capitalism, the USSR and the USA, clearly influenced aid.

Both countries used aid as a tool to win the support of newly independent countries in Africa, Asia and Latin America. The US provided economic and military aid to countries that aligned with Western values. Similarly, the Soviet Union offered aid to nations that embraced socialism.

After the September 11, 2001 attacks, foreign aid took on a new dimension, particularly in the Middle East and Central Asia. The US and its allies increasingly tied aid to counter-terrorism.

Countries like Afghanistan and Pakistan became major recipients of military and economic aid because the US and the EU and Canada and Australia wanted to fund counter-terrorism. Today, new countries have become involved in overseas aid. Alongside the USA and the UK and EU and Japan, China has become one of the most influential countries in aid.

Most famously, they launched the Belt and Road Initiative. The idea was to connect China with countries across Asia, Africa and Europe. China provides loans, investments and aid to build things like roads, railways and ports. In the developing world, if there is a major infrastructure project, it's quite likely that China funded it.

There has also been the rise of private aid. Wealthy individuals like Bill Gates now play a large role in global aid. Earlier in this episode, I mentioned some of the purposes and benefits of aid, like improving living conditions. However, foreign aid is not without controversy. Even people who support the idea of helping countries sometimes criticise aid.

One of the main criticisms of foreign aid is that it's often given to political allies rather than the countries that need it most. This is clear if you look at the countries that receive the most donations and aid. I found a 2018 article that stated the poorest countries in the world were the Democratic Republic of Congo, Mozambique, Uganda, Tajikistan and Haiti.

You would expect these to be the biggest recipients of aid, but they were not. The main countries receiving UK overseas aid were Pakistan, Syria, Ethiopia, Nigeria and Afghanistan. The main countries receiving US aid were Israel, Egypt, Jordan, Afghanistan and Kenya.

Instead of prioritising the poorest nations, governments frequently direct aid towards countries that serve their geopolitical interests. These are countries with diplomatic importance, or potential trade opportunities, or in areas the country wants influence. This is often obvious with China as well. For those of you who don't know, China maintains something called the One China Policy.

Basically, a country can either officially recognise China or Taiwan. They can't recognise both. There are currently only 13 countries that recognise Taiwan as a country, but there used to be more. In the past few decades, countries like Costa Rica, the Dominican Republic and the Solomon Islands have switched from recognising Taiwan to China.

Often, a large amount of aid or loans from China comes their way soon after. China may build some infrastructure projects or fund some constructions of roads or bridges or stadiums. Furthermore, the fact that a lot of aid is tied aid is very controversial.

I mentioned Tide Aid earlier. For example, a country receiving Tide Aid from the United States may be required to purchase American products, machinery or services, even if it is cheaper or there are better alternatives somewhere else. This not only reduces the impact of aid, but can also distort local economies because they have to buy things that they don't necessarily need.

Not all aid is given in the form of grants as well. Many foreign aid programs are actually loans that come with high interest rates and strict repayment conditions. Many African and Asian nations have found themselves struggling with debt from such loans. A very famous example is the Hambantota port in Sri Lanka. Sri Lanka wanted a port.

but Canada, the EU and India all refused to help finance the project because they said that the port would not be successful. It was not a location that was going to return money for Sri Lanka. Sri Lanka still wanted this port though, so they went to China and China was happy to finance the project. China loaned Sri Lanka the money and Sri Lanka used Chinese companies for the construction.

Then the port wasn't very successful and Sri Lanka couldn't pay back the loans to China. So the Sri Lankan government leased the entire port to China for 99 years. Basically, China gave Sri Lanka money. Sri Lanka used that money to hire Chinese companies. Sri Lanka also had to pay the loan back. Now they have given the entire port to China and they still have to pay the loan back eventually.

China kind of got a free port if you think about it. Other countries do this as well, it's not just China. Tied aid and development loans have to be paid back and if the country's economy does not develop enough paying back these loans can be really difficult for countries. Foreign aid is also frequently criticized for being misused or misallocated due to corruption and another major concern is that foreign aid can create dependency.

When a country becomes too reliant on foreign assistance, it may fail to develop its own economy, industries and governance structures. Overall, there are some amazing benefits of foreign aid. Improving living conditions, helping a country economically develop, responding to crises and building relationships.

But at the same time, there are also criticisms of aid being given to friends and allies rather than the people who need it most. Or aid being "tide aid", requiring a country to buy products from the country giving money, or aid putting countries into debt. So I think this balance is quite hard to find. So here is today's final thought. Today I've tried to introduce you all to foreign, international and overseas aid.

We've talked about different types of aid, their purposes. We've looked at the history and development of aid. And I ended by looking at some of the criticisms. I personally believe that aid is a good thing in general. At the same time, I'm very wary of tied aid and aid given for political rather than humanitarian reasons.

I think that rich countries, wealthy countries often made their money off the exploitation of poor countries. I think that's true. As a British person, the UK became wealthy off the back of colonialism. We made our money from the poorest countries in the world, basically.

So I think the UK has a responsibility to use some of its wealth and resources to help other countries develop and industrialise and improve living conditions around the world.

But I am very wary of politicians saying this is what they're going to do, but then doing something a bit different. Using aid as a political tool or using foreign aid as a way of boosting their reputation only. Not really doing projects that make actual importance. Not really encouraging a country to economically develop. But what do you think?

What is your opinion on this topic? It's in the news recently, so I want to know what you are thinking.

You can leave a comment on Spotify, on Apple, on YouTube, or if you're a Patreon subscriber, you can reach out to me and let me know. I do conversation clubs for Patreon subscribers six times a week. We have a film club for Patreon subscribers, bonus episodes for Patreon subscribers, study packs for Patreon subscribers, and ad-free, commercial-free episodes for Patreon subscribers every single week.

£5 a month, you can listen to episodes, study packs, ad-free episodes. £10 a month, you can also join the Conversation Club. Go and join now. Thank you for listening and I'll see you next time. Goodbye.

As a longtime foreign correspondent, I've worked in lots of places, but nowhere as important to the world as China. I'm Jane Perlez, former Beijing bureau chief for The New York Times. On Face Off, the US versus China, we'll explore what's critical to this important global relationship. Trump and Xi Jinping, AI, TikTok, and even Hollywood. New episodes of Face Off are available now, wherever you get your podcasts.