The Effects of Lending Institutions

By October 17, 2018 Health

Developing countries such as the Democratic Republic of the Congo (DRC) lack some basics necessities that would help them overcome the lower living standards that plague their country. Lending institutions such as the World Bank and IMF offer assistance by providing funding in the form of loans for projects or policy that are structured to fight poverty or global economic crisis. Projects and policies can be directly or indirectly supported. Heath care and human capital are key areas for which this assistance and reform are needed. Proper health care is essential to ensuring that the population stays healthy.

According to Hanushek, “The focus on human capital as a driver of economic growth for developing countries has led to undue attention on school attainment. ” (Hanushek, 2013). Helping or Hindering Financial institutions such as the World Bank and the IMF are designed to help developing countries overcome poverty. According to worldbank. org website the World Bank is one of the largest sources of funding that helps developing countries provide schools, health care centers, necessities such as clean water, electricity, and environment preservation (Irving, 2013).

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The IMF is also a financial institution that helps developing countries but its primary focus is to protect international trade. When institutions such as these provide loans needed to battle poverty the out come should be positive. But what happens when the country is over wrought with corruption? Does the poverty stricken community actually benefit or does it get redirected to corrupt government officials. According to (Sanyanga, 2013) The poor rarely benefit, as in the Grand Inga Dam project. The Grand Inga Dam is proposed for the Congo River in the Democratic Republic of Congo. It would be the world largest hydropower serious of dams.

This is an $80 billion project that is designed to develop a power grid across Africa that will spur the continent’s industrial economic development (Sanyanga,n. d). Aside from the fact that several thousands of people will be displaced because of the hydro dam development, whom will actually benefit from the power generated? According to Hathaway, the lack of benefits from the existing dams to local communities, and the social and environmental problems left in their wake, are raising questions about who exactly will benefit from the expansion of large hydropower on the Congo River.

If future projects do not bring benefits to those Africans most in need, it will have the double effect of making development dollars less available for projects that would better meet their needs (Hathaway, 2006). Although financial assistance is meant to help developing countries it does not always turn out that way and ends up having negative social and political impacts. The effects of a healthy population on economy of DCR Health is an important factor in any country’s economy. Healthy people are more productive and in generally more content to perform well in their job.

In developing countries like the Democratic Republic of Congo there is a large problem with Malaria. The Department for International Development in a UK Government agency that offers aid and Humanitarian Assistance to developing countries in need. In a Business Case and Intervention summary they have found that evidence that suggested that the impact of malaria has a negative impact on business, which in turn affects the economy. “There is evidence to suggest that the impact of malaria on growth is due to the effects on total productivity with a 1% increase in the incidence of malaria reducing total factor productivity by 0.

58%–0. 75% . In Sub-Saharan Africa, 72% of respondent firms in a survey reported deleterious effects, with 39% reporting serious impacts through absenteeism, lower productivity, increased costs, education and skills, cognitive abilities, poor skill matching, increased labor turnover, and hiring and training costs. ”(The Department for International Development, (n. d. )). Increasing the health care will also keep workers healthier and more productive. If the general population of a developing country were good, then it would make it more attractive to foreign investors.

Investors would be confident that the workforce is productive. It would also eliminate any travel concerns that otherwise would make the investors unwilling to travel to a country that had many health issues or diseases. Another way a healthy population helps the economy is the human capital. Healthier children learn more that sickly children. They have a greater life expectancy therefore investment in education becomes more valuable. Education is important for the future workers in the DRC because economic growth is dependent on a work force with basic skills.

DRC leadership use of Foreign aid to improve its health care system. The DRC has agreed to abide by the Paris Declaration on Aid Agreement. This agreement established a framework to make aid more effective. (Lemoyne, 2013). Foreign aid does not always mean that the AID is financial. Often time humanitarian groups will provide much needed services to help developing countries. One such even is the MSF vaccinating more than 26,000 children from a measles outbreak in South Irumu despite the violent fighting between the government and the militia of the Front for Patriotic Resistance of Ituri (FRPI).

Although tensions are high and the violence is unstable, the government has allowed the MSF to provide “medical assistance, in addition to distribute basic supplies, including mosquito nets, blankets, plastic sheeting for shelters, containers, and soap, to nearly 9,900 families living at displaced persons’ sites. Logistics teams have also been working around the clock to set up water treatment and pumping stations and distribute drinking water to 45,000 people (215m? of water per day). Around 840 latrines were built to prevent the risks of epidemic associated with poor sanitary conditions. ” (“Democratic republic of,” 2013).

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