Author(s): Julie Aubut
Many maintain that the provision of foreign aid to less wealthy countries is a long- standing initiative that dates back to the founding of the firs t relief organizations in the 18 th and 19 th centuries. Others contend that fore ign aid for the purpose of development was initiated by Truman’s speech in 1949, in which the expression ‘underdevelopment’ was first used. 1 . Nevertheless, the necessity for the Western World to provide financial assistance to developing count ries has been widely accepte d. Poor countries need such assistance to further economic growth, alleviate poverty and increase the standards of living of their citizens. The World Bank (WB) (1998) estimated that foreign aid accounts for as much as 7 to 8% of a typical low income country’s gross national product. The 2001 proportion, levelled at 6%, is still in line with these results. This makes foreign aid their primary source of external finance.