ABSTRACT
Foreign economic aid is at the crossroads. There is an atmosphere of gloom and disenchantment surrounding international aid in both the developed and developing countries - more so in the for than in the latter. Doubts have grown in the developed countries, especially among the conservatives in these countries, as to the effectiveness of aid in promoting economic development, the wastes and inefficiency involved in the use of aid, the adequacy of selfhelp on the part of the recipient countries in husbanding and mobilizing their own resources for development and the dangers of getting involved, through extensive foreign-aid operations, in military or diplomatic conflicts. The waning of confidence on the part of the donors in the rationale of foreign aid has been accentuated by an increasing concern with their domestic problems as well as by the occurrence of armed conflicts among the poor, aid-recipient countries, strengthened by substantial defence expenditure that diverts resources away from development. The disenchantment on the part of the recipient countries is, on the other hand, associated with the inadequacy of aid, the stop/go nature of its flow in many cases, and the intrusion of non economic considerations governing the allocation of aid amongst the recipient countries. There is a reaction in the developing countries against the dependence, political and economic, which heavy reliance on foreign aid generates. The threat of the increasing burden of debt-service charge haunts the developing world and brings them back to die donors for renewed assistance and/or debt rescheduling.
