JOURNAL ON FOREGIN AID:THE ROLE OF FOREIGN AID IN POVERTY REDUCTION IN TANZANIA

1. INTRODUCTION
This journal will examine the role of foreign aid in poverty reduction in Tanzania. To start, the journal defines different terms in order the concept of foreign aids to be understood. The meaning of Aid (“international aid", "overseas aid" or "foreign aid) ", is the help, mostly economic, which may be provided to communities or countries in the event of a humanitarian crisis or to achieve a socio-economic objective. Foreign aid may be administered on either Bilateral or Multilateral basis. Foreign aid is the provision of resources from developed to less developed countries. This is usually from the Western democracies to the Third World and, more recently, to Eastern Europe. Aid may take the form of finance or credit, or other forms such as expertise, education and training.

The provision of aid is to encourage development but donors of tied aid are rewarded, perhaps by interest payments from the receiving nation, access to new markets, or by political allegiance. Furthermore, agencies such as the International Monetary Fund or the World Bank may impose structural adjustment of the economy as a condition of receiving aid. The ‘charities’, or non-governmental organizations, also provide aid but with fewer conditions and more emphasis on development. Bilateral Aid is given by the government of one country directly to another. Many dedicated governmental aid agencies dispense bilateral aid, e.g. USAID, SIDA, CIDA, AusAID and DFID, to support project and programme for a specific purpose such as funding for the education sector of a country. Multilateral aid is given from the government of a country to an international agency such as the World Bank, the International Monetary Fund, or the European Development Fund. These organizations are usually governed by the contributing countries. Almost all aid from multilateral donors is in the form of loans, for example supporting the government budget; the funding is directly channeled into the financial system of the recipient country.

Foreign aid is the subject of intense debate within academia, politicians, and development practitioners as well as among members of the public. Humanitarian aid is a rapid assistance given to people in immediate distress by individuals, organizations or governments to relieve suffering during and after man-made emergencies (like wars) and/or natural disasters, e.g. food aid. Development aid is assistance given by developed countries to support development in general which can be economic or social development in developing countries.
Food aid: Food is given to countries in urgent need of food supplies, especially if they have just experienced a natural disaster.

Technical assistance: Educated personnel, such as doctors are moved into developing countries to assist with a program of development. Can be both programme and project aid.
Emergency aid: This is given to countries in the event of a natural disaster or human event, like war, and includes basic food supplies, clothing and shelter.

2.THEORETICAL LITERATURE REVIEW
Foreign aid only emerged as a significant and institutionalized aspect of U.S. diplomacy and international relations during the Cold War. After 1945 the United States and the Soviet Union presided over expanding alliance systems and increasingly disbursed large quantities of economic as well as military aid to the developing nations of the emerging Third World. During the Cold War, the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (the World Bank), and the United Nations also played growing roles in distributing foreign aid and promoting economic development. The IMF and the World Bank have been heavily financed and influenced by the United States and, prior to the end of the Cold War, the governments of the Soviet bloc generally refused to participate in those organizations. While most observers acknowledge that the disbursement of foreign aid by the United States has been driven by the interaction of politico-strategic and economic interests, the relative importance of these factors has been a subject of ongoing debate. There are also commentators who emphasize the importance of humanitarian impulses in the distribution of foreign aid.

It is given by governments through individual countries' international aid agencies and through multilateral institutions such as the World Bank, and by individuals through development charities such as ActionAid, Caritas, Care International or Oxfam.
Concerning to foreign aid, the speech in which Harry Truman announced the foundation of NATO is a fundamental document of development policy. "In addition, we will provide military advice and equipment to free nations which will cooperate with us in the maintenance of peace and security. Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people."

Many of the new priorities reflected a growing recognition of the ongoing process of globalization’s impact on foreign aid, which has flourished since the breakdown of rigid trading blocs in the former communist world, as well as the embrace of free trade by Third World nations such as Mexico and South Korea. As noted, it has also brought new attention to transnational issues such as environmental destruction, infectious disease, and terrorism.

Globalization has certainly greatly accelerated international communication and trade. It has, for instance, allowed U.S. exports to Central America to double since 1992 to almost $10 billion annually. The process has won a wide following in U.S. foreign aid circles; in 1989 a study conducted by USAID pointed to a seven-point annual growth rate difference between the most and least open economies. In 2000, the World Trade Organization (WTO), an international body that promotes free trade and supports developing countries with technical assistance training, published a paper by Dan Ben-David and L. Alan Winters that argues that poor countries engaged in free trade are able to lift their living standards. The authors cite the experience of South Korea, whose economy jumped 700 percent since the 1960s. In a similar study of eighty countries over four decades, the World Bank agreed that economic openness is linked to higher living standards and growth.

The rise of globalization has thus been used by foreign aid administrators to make the case for liberal capitalist models of development, and has undermined the 1970s ethic of direct government-to government economic transfers to the Third World. As a result, while USAID did not abandon its development projects, it began to tailor them more closely to market results. Yet the U.S. support for just such policies, as exemplified in its leading role in the agencies that promote globalization such as the World Bank, International Monetary Fund, and World Trade Organization, has opened it to criticism that it is forcing them onto Third World nations who would prefer a different path to development.

In a 1987 study, Michael Hunt criticize foreign aid that "development was the younger sibling of containment" and "drew its inspiration from the old American vision of appropriate or legitimate processes of social change and an abiding sense of superiority over the dark-skinned peoples of the Third World." Writing in 1978, Ian J. Bickerton noted that "foreign aid has enabled former colonial powers, such as the United Kingdom and France, to maintain their historic political, economic, and cultural ties with former colonies … it is precisely this network of Atlantic-European domination and imperialism that forms the basis of the current aid programs." This assessment was echoed by the World Trade Organization protesters in Seattle, who accused the United States and other Western countries of perpetuating a mechanism of worldwide economic imperialism—née globalism.

In the view of globalization's critics, this process is just another way for rich countries like the United States, with only a fraction of the world's population, area, and natural resources, to manipulate the global money market, to control much of the world's trade, and to reserve most of the world's raw materials for its own use. In many ways, of course, foreign aid does continue the relationship that began under an earlier, imperialist past, particularly for colonial powers like Britain, France, and Belgium. Yet many other countries, such as the Scandinavian nations and Canada, who lack an imperialist history, have also become foreign aid donors, as Olav Stokke noted in a 1996 article. An overemphasis on the imperialism of foreign aid overlooks the importance of their "humane internationalism," which he termed "an acceptance of the principle that citizens of industrial nations have moral obligations" to the outside world.


2. EMPIRICAL LITERATURE REVIEW
Tanzania has received aid to support development in most sectors, with a changing emphasis over time from agriculture and transport in the 1960s to industry and energy in the 1970s. For example, AID spending for development projects in Tanzania, has increased by some 500 percent between last year and this year. Such a rewarding of Tanzania casts serious doubts on whether Americas foreign economic assistance policies are serving Americas interests and the interests of the long and needlessly suffer learning the lessons from Tanzanians mistakes, the Bush Administration should revise its economic assistance policies toward Africa. In doing so, it should Use the Index of Economic Freedom, a system for evaluating a countries progress in developing a market economy, to determine whether America should assist various countries economically. This would assure that U.S development funds are allocated to countries where they can be used productively Reduce AIDS Development Fund for Africa (DFA its main funding account for African development assistance. The fact that AID has increased its spending in Tanzania by some 500 percent from last year to this, despite the Tanzanian government’s half-hearted movement toward a market economy, strongly suggests that AID is spending excessively and wastefully in other African countries too.

Despite the volume of aid received, Tanzania is still considered as one of the poorest aid dependent countries. This has resulted due to Aid challenges which include management capacity, coordination, external resources management, aid harmonization, transparency and accountability. Since then, there have been a number of initiatives both at the national and international level with a view to making aid more effective and efficient. For instance, in 2006, the government of Tanzania formulated the JAST in the spirit of national and international commitments. The overall objective of JAST is to contribute to sustainable development and poverty reduction in line with National Vision 2025 and the Zanzibar Vision 2020 by consolidating and coordinating government efforts and development partners’ support under a single government-led framework to achieve results on MKUKUTA and MKUZA as well as other national development and poverty reduction programs.


4. POLICY REVIEW
Tanzania's history of development cooperation dates back to the early 1960s when external financing policy was broadly derived from socio-economic policies spelt out in the ARUSHA Declaration of 1967 and from Tanzania's policy of Socialism and self-reliance. Under Tanzania's policy of Non-Alignment, aid could come from any source regardless of the political leanings of the donor/lender. Overall, external aid had to help Tanzania to achieve its Socialist development goals.

5. CONCLUSION
The economist William Easterly and others argue that aid can often distort incentives in poor countries in various harmful ways. Aid can also involve inflows of money to poor countries that have some similarities to inflows of money from natural resources that provoke the resource curse. Many also criticize U.S. Aid in particular for the policy conditionality that often accompanies it. Emergency funds from the International Monetary Fund and World Bank, for instance, are linked to a wide range of free-market policy prescriptions that some argue interfere in a country's sovereignty. I believe that, foreign aid is important but not necessary for sustainable development. Therefore in order for a country to benefit from aid it should have its priority, capacity to handle the aid and it should be used to compliment not to replacement the available resources.

In general the government should make sure that foreign aid focus on improving home based technology and domestic capital expansion for the country to realize sustainable, robust and independent community economic development.