Bilateral Aid to Latin America: Foreign Economic Assistance from Major Donor Nations

by Francis Adams


Despite an abundance of natural resources and relatively strong economic growth in recent years, Latin America continues to be characterized by widespread poverty. Tens of millions of people do not have access to safe drinking water, adequate nutrition, primary health care, or basic education. These conditions are largely the consequence of profound inequalities in the distribution of income and wealth. The richest 20% of the population earns 60% of income while the poorest 20% earns just 3% of income. Inequalities are especially pronounced along gender and ethnic lines, with women and minorities disproportionately among the region’s poor. Natural environments are also under intense pressure as air and water pollution, soil erosion, deforestation, biodiversity loss, and the destructive impact of climate change worsen with each passing year.

Latin American nations must find ways to improve basic living conditions while simultaneously preserving natural resources and ecosystems. Addressing these challenge will largely depend on the people of this region; social and economic progress is only possible and sustainable if it emanates from within each country.

At the same time, domestic resources fall well short of existing needs and the international community can play a supplementary and supportive role in facilitating the type of changes needed within these nations. Official development assistance (ODA), or foreign aid, can augment the resources available to meet social, economic, and environmental needs. ODA, which includes grants, concessional loans, technical assistance, and the direct provision of medicines, machinery, or grains, has been channeled to Latin America for nearly a century. When well-designed and properly-administered, such assistance can complement and strengthen national development efforts.

Although foreign aid is a multibillion dollar enterprise, and has a significant impact on the nations and peoples of Latin America, there a few overall accounts of the bilateral assistance programs of major donor countries. At present, tens of billions of dollars in aid flows to the region each year to fund a range of development projects and programs. Despite its longevity, scale, and scope, there is little agreement among scholars, practitioners, government officials, or the general public regarding the actual impact of such assistance. There are also few attempts to examine the underlying motivations for the provision of bilateral assistance to Latin America.

This book offers a comprehensive, detailed account of the bilateral economic assistance of six major donor nations—the United States, Canada, the United Kingdom, Spain, Japan, and China—to the nations of Latin America. Focus is placed on assistance that is structured to meet basic human needs, enhance social equity, promote economic growth, preserve natural environments, and support political reform. It thus offers a basic foundation for understanding the nature, impact, and motivations of such assistance to Latin America.

The book also considers the primary reasons why each donor country extends foreign assistance to Latin America. Motivations for the provision of aid typically fall within three distinct traditions. The first tradition links aid to a genuine desire to spur economic growth and improve living conditions in these countries, the second tradition views aid as simply a mechanism for advancing the national interests of donor countries, and the third tradition links aid to private sector interests, with the primary beneficiaries thought to be large corporations based in donor countries. Although these motivations are often portrayed as mutually exclusive, they should be viewed as complementary. Foreign assistance is typically driven by multiple objectives being pursued simultaneously, with the relative importance of each objective time and context-specific. This study draws upon these three traditions to describe and explain the assistance policies of all six donor countries.

This study also offers a series of recommendations for reforming economic assistance to Latin America, with emphasis placed on improving the design, implementation, and oversight of development projects, enhancing coordination among aid institutions, ensuring local control and ownership of the development process, and empowering poor communities. When the poor are active participants in improving their communities, they gain the knowledge, skills, and resources necessary to meet their own needs on a long-term basis. Since economic assistance will continue to be a major component of the foreign policies of donor states, it will be important to ensure that such assistance genuinely contributes to positive, meaningful, and lasting change in the region.

Bilateral Aid to Latin America is an important volume for university libraries and research institutes. It will augment collections that focus on Latin America, international development, and economic assistance. The book would also be relevant for scholars and practitioners of Latin American development, as well as undergraduate and graduate courses on Latin America and international political economy.


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