Q-15=Discuss importance of foreign assistance in economic development of Pakistan
FOREIGN ECONOMIC ASSISTANCE / AIDForeign economic assistance is a provision of financial and physical forms of assistance to the developing countries for strengthening their economies. Different loan-terms are explained below.
1 Bilateral aid means that when a country gets a loan from another country
2 Multilateral aid, when international agencies such as World Bank, International Monetary Fund, International Finance Corporation, International Development Agency, Asian Development Bank, Islamic Development Bank, Pakistan Development Forum, provide loans/Aid.
3 Tied aid is provided on raw material or machinery purchased from loan given country.
4 Untied aid is given without any pre-condition, borrower can use it according its needs and requirements and from any country.
5 Food aid is provided in terms of wheat, rice etc to overcome food shortage
6 Technical Assistance is consultancy services, technical expertise, and installation of heavy projects etc.
7 Grants are given on humanitarian grounds for help in case of famine, floods, and earthquake, which are not to be repaid to the donor country.
8 Soft loan is repaid after 25 years and interest rate from 1% to 3%.
9 Hard loan is paid within 25 years and interest rate more than 3%
10 Project Aid/Assistance loan is give for completion on one particular project
11 Direct foreign investment means International/foreign countries companies/corporation invest in services and industrial projects in Pakistan for the sake of income/profit.
IMPORTANCE OF FOREIGN ECONOMIC ASSISTANCE
Foreign economic assistance is very important for economic development of Pakistan. The benefits of such assistance/aid are as under: -
1. Foreign loan bridges savings gap as well as balance of payments gap.
2. Development requirements are met and productivity of various sectors of economy increases.
3. Establishment of modern economic and social infrastructure and increase in in employment opportunities.
4. Level of technology increases and higher quality goods are produced.
5. Emergency requirements are met.
6. Defense is modernized.
7. Increase in tax revenue.
FOREIGN ECONOMIC ASSISTANCE / AIDForeign economic assistance is a provision of financial and physical forms of assistance to the developing countries for strengthening their economies. Different loan-terms are explained below.
1 Bilateral aid means that when a country gets a loan from another country
2 Multilateral aid, when international agencies such as World Bank, International Monetary Fund, International Finance Corporation, International Development Agency, Asian Development Bank, Islamic Development Bank, Pakistan Development Forum, provide loans/Aid.
3 Tied aid is provided on raw material or machinery purchased from loan given country.
4 Untied aid is given without any pre-condition, borrower can use it according its needs and requirements and from any country.
5 Food aid is provided in terms of wheat, rice etc to overcome food shortage
6 Technical Assistance is consultancy services, technical expertise, and installation of heavy projects etc.
7 Grants are given on humanitarian grounds for help in case of famine, floods, and earthquake, which are not to be repaid to the donor country.
8 Soft loan is repaid after 25 years and interest rate from 1% to 3%.
9 Hard loan is paid within 25 years and interest rate more than 3%
10 Project Aid/Assistance loan is give for completion on one particular project
11 Direct foreign investment means International/foreign countries companies/corporation invest in services and industrial projects in Pakistan for the sake of income/profit.
IMPORTANCE OF FOREIGN ECONOMIC ASSISTANCE
Foreign economic assistance is very important for economic development of Pakistan. The benefits of such assistance/aid are as under: -
1. Foreign loan bridges savings gap as well as balance of payments gap.
2. Development requirements are met and productivity of various sectors of economy increases.
3. Establishment of modern economic and social infrastructure and increase in in employment opportunities.
4. Level of technology increases and higher quality goods are produced.
5. Emergency requirements are met.
6. Defense is modernized.
7. Increase in tax revenue.