Question

13& 14 pls

QUESTION 13 Official development assistance is usually tied to the political and economic interests of the donor country (like the USA or Germany) even though it may be given to support socioeconomic development or alleviate poverty in the receiving country. O True O False QUESTION 14 Risk pooling is a concept that requires the rich to subsidize the cost of care for the poor, and those who are healthy subsidize the cost of care for those who are sick O True

Answer 1

QUESTION 13: SOLUTION: The correct option is the 1st option i.e TRUE

Most of the countries are focused and indulge in the foreign aid process either as donors or as the recipients of the aid. Foreign aid is normally given by the developed donor country for some apparent and primary reasons like supporting the socio economic development or alleviating the poverty in the receiving country. But the fact is that the Donor Countries use foreign aid that they are giving as a means of pursuing their foreign policy objectives. That is to say that when donors give the aid they connect or tie it to their political and economic interest of the donor country. The aim of the donor countries is to further their economic interests so the Recipient countries must be able to provide a favorable climate for the fulfillment of the objectives of the donor country and only then they will be in a position to receive more assistance.

Since the official development assistance is usually tied to the political and economic interest of the donor country , the aid that is given by the donor country can be withdrawn in order to create economic hardship or to shake up the stability of an unfriendly or ideologically antagonistic regime.

The motive of the donor country in giving the foreign aid can be seen in the practice of the donor countries in tying the aid. Tied aid is when the donor country binds its aid for example to the procurement of goods and services from the donor country, or that the recipients buy the equipment, arms, materials, supplies, parts and services, or other commodities made in the donor country and thereby furthering their economic interest. The main intent is therefore to increase the market opportunities for the donor’s business interests though it may seem to be given to support socio economic development or alleviate poverty in the receiving country. Tying aid is a common practice among many developed donor nations and reports state that, the United States has tied approximately 75% of its aid, while Greece has tied 70%, and Canada and Austria have tied about 40% of their foreign assistance. Tying aid can have an impact of reducing the value of the aid because it restrains the recipient country from acquiring the best-quality products and services at the lowest prices.