With the passage of time, aid, specifically foreign aid has grown in a significant manner. The paradox is that aid to the underdeveloped countries did not actually enhance the economical condition or trade of that country, specifically in African countries. On the other hand, it is seen that Asian countries has experienced strong economic growth and strengthened the trade relationships with neighboring countries even without accepting foreign aid. The debate is, whether aid facilitates the trade relationship.
Argument in favor of trade
Trade has a long-term impact upon international co-operation. Developing countries maintain trade relationship with other countries to develop ongoing trading relationship. This will eventually help to flow money and goods in the developing countries, irrespective of the economical condition of the developed country. In contrast, if the developed country goes through a bad economic time, the aid budget may be cut.Trade helps developing countries to maintain their dignity, whereas aid is more or less related to the act of getting approval and support from the developed countries. It can be treated as a form of charity, where the developing countries need to admit the superiority of the developed country.
Trade establishes a strong impression in the international market, whereas the country administering aid is considered as an unimpressive country.
Trade promotes economical improvement of the country, but in the event, if aid is mishandled, then the people of the country will be deprived from getting the benefits and eventually obstruct the growth of the country.
Argument in favor of aid
Aid is given to a country to be well apportioned against their need. On the other hand, trade is treated as an inefficient distributor of resources. The benefit of trade is mostly confined within elite group of people of the country.Aid is not always provided in the form of money and is sometimes provided through expert advisors. On the other hand, trade needs a good infrastructure of the country to prosper. It is very difficult for the developing countries to maintain a good infrastructure.
