Foreign aid

FOREIGN AID

• A major problem for developing nations is DEBT PAYMENT

• Developing nations had to borrow large sums of money to modernize and industrialize

• These nations continue to borrow millions of dollars a year. Most of this money goes to buy food and medical care, and to pay the INTEREST on the loans.

Interest Payments are a heavy burden on the borrowing nations

• In 2005, a group of 28 developed nations agreed to give grants of money to the very poorest nations rather than loans. Loans were forgiven and they do not have to pay them

• This money grants are part of what is called FOREIGN AID

• FOREIGN AID is economic and military assitance given by one nation to another

• After World WAR II, The Marshall Plan, was one of the first U.S. foreign aid programs.

• Since them U.S. has contributed more than $460 billion in foreign aid

• Today U.S. is the second largest contributor or foreign aid in the world, Japan ranks first.

INTERNATIONAL ORGANIZATIONS

WORLD BANK(International Bank for Development and

Reconstruction)• The UN founded the

World Bank in 1944 to lend money to member nations:

• Investment• Foreign trade• Repayment of Foreign

Debts• It provides about 10% of

World’s Foreign Aid

IMF(INTERNATIONAL MONETARY FUND)

• 1945• Agency of UN• Promote economic

cooperation among its 184 member nations

• It works to set exchange rates for their money

• Expand trade

WTO(World Trade Organization)

• 1995• International Trade

agreements and rules violations by memeber nations

• 148 members including all the major nations of the world