The benefits of foreign aid:
1/ For the recipient country:
- Economic growth
- Better living standards through improved health and education services and infrastructure.
- The promotion of greater political stability through democracy, freedom and human rights.
- Sustainable development.
- Improved social justice and equity.
2/ For the donor country:
Strengthens economic, political, strategic and cultural ties between countries.
Economic advantages:
- Provides job opportunities for Australians, increases export sales and helps Australian companies access new and future markets.
- Preferential treatment in access to natural resources like oil and minerals.
Geopolitical and strategic advantages:
- By addressing poverty and other development issues, civil unrest, refugees and terrorism may be reduce.
- Donor countries give aid in return for access to military bases and to solidify alliances.
- Strengthen diplomatic ties.
The costs for recipient nations:
- Environmental – Aid is often given to develop large-scale projects such as mines and plantations so it gives negative impacts in the environment.
- Social and cultural – It promotes the donor country's economic interests more than the local communities, making the recipients over-dependent on aid.
- Economic – when aid is given to the recipients, competition is reduced, prices going up and aid money is wasted.
- Geopolitical – It leads to the corruption in a country because aid usually given through the government and it doesn't reach to the people who really need it.
Cost for Donor countries:
- Giving aid to the poverty and developing countries also means that they remain dependent on Australian annual budget.