LESSON 1: Foreign Aid and Remittances

FOREIGN AID

refers to the resources—such as money, goods, or services—given by one country to another, typically to support development, provide humanitarian relief, or promote political and economic stability.

FOREIGN AID

It can come from governments, international organizations (like the United Nations or World Bank), or non-governmental organizations (NGOs).

1. Bilateral Aid

2. Multilateral Aid

3. Humanitarian Aid

4. Military Aid

5. Development Aid

TYPES OF FOREIGN AID

Bilateral Aid

Direct assistance from one country to another

Multilateral Aid

Provided through international organizations that pool resources from several countries.

Humanitarian Aid

Emergency relief given during crises like natural disasters or war.

Military Aid

Assistance to strengthen a country’s defense systems.

Development Aid

Long-term support for things like education, health, and infrastructure.

1. Promote economic development and poverty reduction

2. Support allies or strategic interests

3. Respond to emergencies and disasters

4. Improve health and education

5. Promote peace and security

PURPOSE OF FOREIGN AID

1. Helps save lives during emergencies

2. Supports economic development and infrastructure

3. Builds international goodwill

PROS OF FOREIGN AID

1. Can create dependency

2. Sometimes misused due to corruption

3. May be tied to political or economic interests of the donor

CONS OF FOREIGN AID

REMITTANCES

are the money or goods that migrants send back to their home countries, usually to support their families

REMITTANCES

These transfers are typically made by foreign workers to individuals in their country of origin and are a crucial source of income for many developing nations.

REMITTANCES

Sent by people working abroad to family or friends in their home country.

REMITTANCES

Usually in cash, but can also include goods, prepaid cards, or mobile money transfers.

REMITTANCES

Sent through banks, money transfer services (like Western Union), mobile apps, or informal channels.

REMITTANCES

Often used for basic needs such as food, education, healthcare, housing, or small business investments.

1. Economic Boost

2. Poverty Reduction

3. Foreign Exchange: Strengthens the receiving country’s currency and reserves.

4. Social Impact: Can improve access to education and healthcare.

PURPOSE OF REMITTANCES

1. Direct financial support for families

2. Helps reduce poverty and improve living standards

3. Can stimulate local economies

PROS OF REMITTANCES

1. May create dependency

2. Economic reliance on labor migration

3. Families may face emotional challenges from long separations

CONS OF REMITTANCES