abhishreshthaa
Abhijeet S
Multilateral aids are preferred over bilateral aids mainly because of the following reasons:
- Since this type of aid is through international financial institutions the host country does not owe to a particular country but to the pool of resources.
- Bilateral aid essentially flows from one country to another and change in policies of the donating country would definitely affect the recipient country.
- Foreign exchange fluctuations would also not be affecting the recipient country.
- The terms of multilateral aids tend to be milder as compared to that of the bilateral aid.
- It safeguards the interest of the donor countries since it is through a common source.
- The project costs become higher when aid is on bilateral basis when the alternative avenues of supplies of goods or services are cheaper and the recipient country has to pay a higher price for the goods imported and for the services rendered from abroad with the result that the debt burden becomes heavier.
- Since this type of aid is through international financial institutions the host country does not owe to a particular country but to the pool of resources.
- Bilateral aid essentially flows from one country to another and change in policies of the donating country would definitely affect the recipient country.
- Foreign exchange fluctuations would also not be affecting the recipient country.
- The terms of multilateral aids tend to be milder as compared to that of the bilateral aid.
- It safeguards the interest of the donor countries since it is through a common source.
- The project costs become higher when aid is on bilateral basis when the alternative avenues of supplies of goods or services are cheaper and the recipient country has to pay a higher price for the goods imported and for the services rendered from abroad with the result that the debt burden becomes heavier.