Foreign aid or development aid can be in the form of humanitarian emergency aid, food aid, military aid etc. Whatever may be the form, Foreign aid has been many times regarded as wasted. The amount and value of the aid is often questioned. However, the importance of foreign aid cannot be ruled out as these are recognized as crucial as they help poor countries to come out of poverty. In the year 1970, affluent countries of the world have agreed upon to annually give 0.7 percent of their Gross National Income as aid. However, times have passed but rich countries are not able to keep up their promise.
There are many faults as related to Aid. Often it is found that actually the poor countries who are mostly in need of aid did not receive it. It is also sad that there are conditions attached to aid such as the recipient of aid must make use of costly goods and services from donor countries. There are also restrictions for market access for the products of poor countries.
Considering the above points, almost half of all foreign aid can be considered as phantom aid. Furthermore, assurance is also given for providing more money but only when more conditions will be fulfilled. These conditions stand as a hindrance for development of the poor countries. The donor country may be benefitting from such a practice but what about the recipient which is in real need of aid?