Question

Question. True or False. Economists are unanimous that foreign aid greatly helps DVCs

Short answer

The above-given statement is false.

Step-by-step solution

Foreign aid

Foreign aid refers to the financial assistance that Industrially Advanced Countries (IACs) provide to the developing countries in several forms. This financial assistance helps these countries to strengthen their economy by developing their infrastructure and thus increasing their capital flow.

Explanation for the statement being false.

Economists argue that the financial aid provided by the IACs doesn’t help much in the development of DVCs.

• Most of the assistance is given with a motive to have an influential power over the economic decisions of the DVCs.
• The majority of the aid is not utilized for development purposes. Corruption diverts the funds to personal political gains and to clear the debt.
• The most affluent DVCs receive a major share of the aid, and those who are less affluent receive only less aid. So the financial aid is only helping some of the DVCs, and some are still not receiving the actual help they need.