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The Effects of War and Peace on Foreign Aid

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Foreign aid encompasses technical, military, humanitarian and financial assistance provided by developed countries to help foster economic, political and social progression in developing countries. Foreign aid results in positive and negative consequences for developing countries and is subject to decisions made by government officials with regard to its distribution (Leonard, 2006). Examined in this paper is the impact of peace and war on foreign aid distribution, specific actions undertaken by government officials to relieve problems resulting from warfare and the role of foreign aid in poverty and warfare reduction in India.
India is not immune to intrastate and interstate warfare. The relationship between India and Pakistan has always been rocky characterized by multiple outbreaks of warfare. However, it was not until the second interstate war of 1965 that international states intervened to offer foreign aid to advance their own selfish agendas. The United States failed to offer any foreign aid to India, as it was not in its best interest (Hagerty, 2005). At the time, Nehru, a strong proponent for socialism led the Indian government. He advocated for the nationalization of infrastructure and business, which undermined privatization. As a result, the Soviet Union was inclined to offer its support, as India served to undermine capitalism (an ideology propagated by the US during the Cold War) (Leonard, 2006).
Post-Cold War India is predominantly a peaceful state with minimal insurgence from internal or external forces. In addition, the relationship between India and the United States yield desirable results for both countries. The US is one of the major providers of foreign aid to the Indian government. By 2004, research findings estimated that India's foreign exchange reserves totaled to $100 billion (Ganguly, 2006). The government invests this money in both

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