The Economic and Financial Committee (EFC)
The question of using unilateral foreign aid programs as a means of political and economic coercion against developing countries
There has always been controversy surrounding the use of unilateral foreign aid programs in developing countries, and the motives of some of the “aid giving” countries. As Mark Leonard from the World economic forum exposes the contradiction in our globalised economic framework: “all players have a common interest in maintaining the system that has generated important benefits for them. But their individual interests of using the system to their advantage, while being as independent from it, as possible trumps the common interest.”
While there are, many positive examples showing the benefits of foreign aid programs with the establishment of a successful economic growth rate by allowing investment into human capital or infrastructure, most cases did lack in decisiveness for the “aid receiving” party, and the amount of repayment eventually outweighed the increase in economic growth. The lending states might use or encourage the use of unilateral economic, political or any other type of measure to coerce another State in order to obtain from it the subordination of the exercise of its sovereign rights (gain political and economic power through suppression). Those unilateral coercive economic measures had a negative impact on the economy and development efforts of developing countries as well as on the international economic cooperation and on worldwide efforts to move towards a non-discriminatory and open multilateral trading system.
This stands in massive conflict with the humane convention of unilateral aid programs of improving the country in need's situation in world economics, the Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States, the Charter of the United Nations, which states “that no State may use or encourage the use of unilateral economic, political or any other type of measure to coerce another State in order to obtain from it the subordination of the exercise of its sovereign rights.”
In order to tackle this problem many steps have been taken, most noteworthy the passing of the resolution 52/181 of 18 December 1997, in which the General Assembly “urged the international community to adopt urgent and effective measures to eliminate the use of unilateral coercive economic measures against developing countries that were not authorised by relevant organs of the United Nations or were inconsistent with the principles of international law as set forth in the Charter of the United Nations”.