Meaning of Aid

The meaning of aid is to assist, mostly economic, which is normally provided to the distressed communities or underdeveloped countries for the enhancement of their socioeconomic condition. Meaning of aid can also be defined as the humanitarian activities executed primarily for providing emergency relief and maintaining long-term sustainable growth in underdeveloped countries.

Types of Aid

Aid can basically be classified as Bilateral Aid and Multilateral Aid.

Bilateral aid is generally provided by the government of one country directly to another country. Two dedicated leading agencies USAID (United States Agency for International Development) and DFID (UK Department for International Development) dispense bilateral aid.

Multilateral aid is dispensed through international agencies like World Bank, IMF (International Monetary Fund) and EDF( European Development Fund).

Beside the above two primary types, aid can also be attained from private individuals and for-profit companies. The amount of their donations constitute an appreciable portion of international monetary transfers. NGOs (Non-governmental organizations) also play a vital role in dispensing aid. These organizations normally provide both humanitarian and development aid.

Some of the other types of aid may include project aid, programme aid, food aid, tied aid, untied aid, emergency aid and partially untied aid.

• Project aid: When aid is provided to accomplish a specific purpose, then it is called project aid.
  
  
• Programme aid: When aid is provided to accomplish tasks in a particular area or sector, like education sector of a country, then it can be called as programme aid.
  
  
• Food aid: When aid is provided in the form of food to the countries in urgent need of food, then it can be called as food aid.
  
  
• Emergency aid: When aid is provided to tackle the emergency situations like natural disaster or war, then it is defined as emergency aid.
  
  
• Tied aid: It is foreign aid that essentially be expended in the donor country or in the selected countries, then it is called tied aid. A developed country normally provides a bilateral loan or grant to a developing country with the restriction that the money should be spent on goods or services produced in the selected country.
  
  
• Untied aid: Untied aid is provided normally to the underdeveloped countries to freely spend money on goods and services in all the countries of the world.
  
  
• Partially untied aid: It is an official aid for which the associated goods and services are necessarily be procured in the donor country or in restricted group of countries.