THBT Tied Aid is a Counterproductive Form of Investment for Developing

Countries

SMAN 14 JAKARTA

(Artha Uli / Maisarah Olivia / Nadhilah Hanina)

(Cons) ( )

The definition of tied aid is an aid that is given from a certain country with a
condition that the recipient of the aid has to spend half or the entire money in the
donors country or a group of selected countries. Some people believe that tied aid is a
complete vain act. Lots of people might think that tied aid only benefits the donors
country. Others said that tied aid can only bring misfortune to the recipient. Well, thats
not true. Tied aid is a strategy from the developed country to help the developing
country in terms of economic, politic, military, and so on. Using tied aid, the donor will
also be able to increase their export activities, and thus, will secure jobs in their country.
So, its a win-win negotiation.

Tied aid can be in any form. It can be in the form of loan, or even military
supply. Therefore, tied aid is not a counterproductive investment for the developing
countries. Instead, it can be a source of helps to facilitate the developing countries in
managing their own nation. These are the reasons why tied aid is needed for LEDCs :

1. For the recipient, it can support development and reduce poverty. Foreign aid in
the form of loan can be spent to make a better life for people. The government can build
more public services, upgrade the public transportation, increase the number of free
schools to help misfortunate people to get education, and many more. That means the
developing country is able to guarantee the people prosperity and the government is
able to gain the peoples trust.

Lots of countries do not have infrastructure for an advance economy, and the aid is there
to assist the recipient country to get a solution. Therefore, tied aid can definitely support
the recipients infrastructure. And when the country is well-developed, it will
automatically reduce poverty in the country and it will create a better land to live in for
the people. Why? Because well-developed means good education, good general health
status, good public services, and great number of job fields.

South Korea is an example of a country that has been benefited from tied aid in the form
of military supplies, technology hardware, and loans. South Korea now has grown to be
one of the most well-developed countries in Asia.

2. Tied aid helps to build a good relationship with other countries. Having a good
relationship with other countries is considered as one of the most crucial necessities of a
country. They will be dependent to each other and help each other out. The recipient
will need the donors money, and the donor will need the recipient to buy their products.

3. Tied aid can develop military alliances. Since the donor has given the recipient
supply of military supplies, it can trigger a military alliance between the donor and
recipient.

4. For the donor, it can increase its export. Since the aid does not have to be in a form
of loan or money, the aid can be in a form of stuff or foods.