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Aid for Trade is about helping developing countries, in particular the least developed, to build the trade capacity and infrastructure they need to benefit from trade opening. It is part of overall Official Development Assistance (ODA) — grants and concessional loans — targeted at trade-related programmes and projects
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Aid VS Trade is a long lasting debate. Pro-aid campaigners present reason that aid is a means of hastening the economy andtrade of the underdeveloped countries.
The anti-aid campaigners believe that aid, specifically through government agencies make the country’s economical condition and trade worse rather than better.With the passage of time, aid, specifically foreign aid has grown in a significant manner.The paradox is that aid to the underdeveloped countries did not actually enhance the economical condition or trade of that country, specifically in African countries. On the other hand, it is seen that Asian countries has experienced strong economic growth and strengthened the trade relationships with neighboring countries even without acceptingforeign aid. The debate is, whether aid facilitates the trade relationship.Argument in favor of tradeTrade has a long-term impact upon international co-operation. Developing countries maintain trade relationship with other countries to develop ongoing trading relationship. This will eventually help to flow money and goods in the developing countries, irrespective of the economical condition of the developed country. In contrast, if the developed country goes through a bad economic time, the aid budget may be cut.Trade helps developing countries to maintain their dignity, whereas aid is more or less related to the act of getting approval and support from the developed countries. It can be treated as a form of charity, where the developing countries need to admit the superiority of the developed country.Trade establishes a strong impression in the international market, whereas the country administering aid is considered as an unimpressive country.Trade promotes economical improvement of the country, but in the event, if aid is mishandled, then the people of the country will be deprived from getting the benefits and eventually obstruct the growth of the country.
Argument in favor of aidAid is given to a country to be well apportioned against their need. On the other hand, trade is treated as an inefficient distributor of resources. The benefit of trade is mostly confined within elite group of people of the country.Aid is not always provided in the form of money and is sometimes provided through expert advisors. On the other hand, trade needs a good infrastructure of the country to prosper. It is very difficult for the developing countries to maintain a good infrastructure.Aid allows for money in a given country to be allocated well against need.Exposing fragile developing economies to free trade is very risky.Trade requires investment first.Aid (Meaning, Definition and Types)
Trade
1. Trade is exchange of goods and services between two countries at an agreed price (denominated in USD or any other hard currency). In some cases it could be batter trade i.e. exchange of goods only through state level
2. Trade could be at State level or corporate level or even at individual level
3. International Trade is conducted through letter of credit and banking channel
4. Bilateral or multilateral trade takes place for mutual economic benefits.
5. Foreign Trade is considered as an instrument of economic development
Aid:
1. Aid is basically given for a noble cause to help others for temporary period.
2. Some high income countries provide certain percentage of their yearly budget or GDP as aid to the poor countries.
3. Aid may be provided in kind or cash, targeted for income generation activities of the poor people or infrastructure development for economic growth
4. Proper utilization of aid requires strong governance and strong institutional capacity of the recipient states
5. When the Aid does not create employment and economic growth, a perpetual aid dependency cycle becomes a regular practice.
Aid VS Trade is a long lasting debate. Pro-aid campaigners present reason that aid is a means of hastening the economy and trade of the underdeveloped countries.
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