This House prefers trade to aid

Foreign aid had grown significantly in absolute terms (if not as a percentage of GDP in the case of many developed countries) but this has shown up a paradox – as aid to Africa has grown, the continent has actually become poorer rather than better off. This is often contrasted with Asia. Immediately after the Second World War, Africa and Asia were both Third World areas. Yet Asia – largely without the sort of foreign aid directed at Africa – has developed a strong economic infrastructure and become a developed area.

This raises the question of what foreign aid achieves and whether on balance it is a positive or negative influence. The debate has been crystallized by the focus on the Millennium Development Goals on increasing aid from the developed world to the poorest countries, and by the failure of the Doha round of World Trade Organization talks to agree a new global trading system that might have benefited many developing economies.


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