The Effects of War and Peace on Foreign Aid Research Paper - 825 Words

The Effects of War and Peace on Foreign Aid Research Paper (Research Paper Sample) Content: The Effects of War and Peace on Foreign AidNameInstitution AffiliationDateThe effects of war and peace of foreign aid in Sierra LeonIntroductionForeign aid is often associated with improving and facilitating economic growth in a country. However, this aid is affected by the environment in the nation. This paper focuses on the positive and negative effects that peace and war have on the distribution of foreign aid in Sierra Leon and the specific actions that the leadership of the country has taken, through the use of its foreign aid from donor nations and international lending institutions, to relieve the severe problems caused by warfare. The paper will also discuss whether or not the extension of foreign aid has successfully reduced poverty and the incidence of warfare in the country.The positive and negative effects that peace and war have on the distribution of foreign aid in Sierra LeonAccording to Kargbo, (2012), foreign aid has had a significant effect on Sierra Leon after the civil war. Foreign aid is a positive determinant in the economic growth of the nation. The aid fills the foreign exchange gap and in effect fosters economic growth in the country. Sierra Leon is a largely mineral-producing country. However, all the inputs and mining equipment have to be imported. Additionally, imports are more evident in the trading sector where a huge part of locally traded supplies are imported. This makes the country spend more on imports than they get from exports. Therefore, a foreign exchange gap is created. Foreign aid from donors fills this gap and ultimately promoted economic growth of the country.The civil war caused havoc in the country as infrastructure was destroyed, institutions were mismanaged, villages were burned to the ground, civilian women and children were victims of rape and defilement and the economy was totally destroyed. Foreign aid did not have any significant impact on the economy during the civil war (Kargbo, 2010). During the time before the civil war, the country relied on foreign aid and this had positive effects on the economic growth of the country. However, during the war, informal foreign aid may have been misused by government officials for their own benefit and the use of official aid was not effected at the time. This quite clearly shows that war negatively affects foreign aid.The effect of leadershipDespite being one of the poorest countries in the world, Sierra Leons economy has been growing since 2000 (World Bank country brief, 2010). In 2008, the Gross Domestic Product grew by about 5.5 percent. The growth was fuelled by foreign aid which was facilitated by proper distribution by the various leaders in government. Reform processes have been ongoing since the civil war with the goal of managing the countrys resources better as well as obtaining a larger portion of the export value of resources for the welfare of the people. More precisely, natural resources have been mainstreamed into th e major peace and development processes in the country such as the 1999 Lom Peace Accord and the poverty reduction strategies. Additionally, Sierra Leon, through its government leadership has become party to several extractive and transparency efforts such as the Kimberly Process and the Extractive Industries Transparency Initiative.The effect of the foreign aid in reduction of poverty and incidences of warfareAccording to Tony Blair (2009), the tourism sector of Sierra Leon was greatly affected by the civil war. However, several years later after the war, the country is thriving and tourists are returning into the country. The foreign investors were optimistic and ambitious about their plans to invest in Sierra Leon. Many travelling agencies are also putting up their companies in the country to facilitate the travelling of investors to and from Sierra Leon with much ease. This has enabled the foreign exchange gap to be filled and as a result the economic growth of the country is fa cilitated (Maconachie, R. 2009).On the other hand, as a consequence of war, corruption and mismanagement in government is inevitable. There exists a significant gap between domestic revenue and expenditure. The government has to rely mostly on financial aid more than domestic financing to execute the budget which tends to increase the debt of Sierra Leon to foreign creditors. However, the government w...