This article will list the largest recipients of international aid and examine their economic statuses to explain why these nations depend on foreign aid. If you’d like to skip our overview of why major aid-receiving nations like Yemen, Afghanistan, and Somalia aren’t on this list, read 10 Countries That Receive The Most Foreign Aid Per Capita.
Countries that receive the most foreign aid per capita are not those getting the largest total amounts but the ones with smaller populations and consistent foreign aid flows. According to the OECD’s report, developing countries in Oceania, i.e., Tuvalu, Nauru, Palau, and the Marshall Islands, are among the countries that receive the highest foreign aid per capita. Notably, donor countries that allocate humanitarian aid see more stable environments in smaller nations, courtesy of the focused attention and support they receive. Conversely, larger nations, despite receiving heftier sums, may not exhibit the same level of transformative change from foreign aid. Countries with the highest rates of poverty largely depend on foreign aid because of their limited resources and, oftentimes, high population growth rates.
According to the OECD, foreign aid reached an all-time high of $204 billion from all official donors, up from $186 billion in 2021. Alarming levels of food insecurity and the refugee situation have compelled developed countries to spend more on humanitarian aid. However, foreign aid is not as simple as seeing a country in need and giving it money to lift its economic status because the ground realities of monetary help often don’t yield significant results.
For instance, billions have been poured into Afghanistan’s reconstruction post-2001, a portion of which goes to the education sector. However, in the mid-2010s, journalistic investigations by BuzzFeed revealed that many schools in Afghanistan, built using foreign aid, either didn’t exist or there were exaggerated claims about the number of students enrolled in them. These instances gave rise to the term “ghost schools,” and the funds meant for these projects were believed to have been siphoned off by warlords and corrupt local officials. This is just one example of how well-intended foreign aid needs strict monitoring to yield the expected outcomes.
When discussing opinions on foreign aid, William Easterly, an American Economist and professor of economics at New York University, critiques the foreign aid system for its inefficiency. In his book, “The White Man’s Burden,” Easterly is particularly critical of sweeping plans and initiatives to “eradicate poverty” or achieve similar grand goals without clear, measurable steps or accountability. He argues that such initiatives don’t consider ground realities and fail to achieve their objectives.
On the other hand, Jeffrey Sachs speaks in favor of foreign aid and believes that many of the world’s poorest countries are stuck in poverty traps. These traps are situations where they cannot achieve sustainable economic growth without external assistance. Notably, these poverty traps can be due to food insecurity, poor infrastructure, lack of access to education and health services, or geographical and environmental challenges.
Regardless of the opinions, substantial portions of foreign aid from OECD countries, namely the US, Germany, the EU, and the UK, go to the poorer parts of the world. We have already discussed the 25 Countries That Give the Most Foreign Aid Per Capita; read our article to know which nations allocate generous budgets to help others.
Spending Foreign Aid Smartly Is The Way Out
Natural disasters and humanitarian crises call for immediate monetary help. But what usually happens when they settle down? The affected countries are left to deal with the aftermath without a clear direction for the future. Therefore, economists like Nobel-prize winner Paul Romer have spoken about the importance of ideas and innovation in driving economic growth. Romer’s “endogenous growth theory” concept explains the value of investing in knowledge and innovation, which are key components of startup and growth ecosystems.
If we talk about countries that have invested well in knowledge and innovation, South Korea and Japan come to mind. After the Korean War ended, South Korea received substantial foreign aid (over $13 billion from the US alone) to invest in its core sectors. Today, the country’s companies, like POSCO Holdings Inc (NYSE:PKX) and SK Telecom Co., Ltd (NYSE:SKM), are worth billions and have created thousands of jobs in the country.
Notably, POSCO Holdings Inc (NYSE:PKX) is among the most valuable Korean companies in the world and is involved in power generation and the trading of steel & raw materials sectors. SK Telecom Co., Ltd (NYSE:SKM) provides wireless telecommunication and internet services; the company’s products include mobile phones, wireless data, and information communication, among others. While SK Telecom Co., Ltd (NYSE:SKM) and POSCO Holdings Inc (NYSE:PKX) are not products of foreign aid, they surely depict how a country’s resilience in technology and innovation can lift it out of adversity.
Likewise, after World War II, Japan received aid from the US, which was instrumental in rebuilding the country’s economy. Japan then transformed into the third-largest economy in the world and became the 5th largest donor in terms of the dollar value of its foreign aid (ODA) to other countries, according to Princeton University. In the current economic landscape, Japan’s Toyota Motor Corporation (NYSE:TM) is one of the biggest car companies by sales, reflecting the country’s immense progress.
Toyota Motor Corporation (NYSE:TM) held its title as the world’s top-selling automaker firmly in 2022. Besides employing over 300K people, the company’s sales are also impressive, recording over 10 million vehicles sold worldwide in 2022. Notably, after World War II, Toyota Motor Corporation (NYSE:TM) collaborated with the US to learn techniques and technology in vehicle manufacturing, making it one of the largest car companies in the world. This stamps our point about how investing in innovation and human capital can make countries self-sufficient rather than relying on foreign aid, which often leads to significant corruption scandals.
Let’s now proceed with countries that receive the most foreign aid per capita.
25 Countries that Receive the Most Foreign Aid Per Capita
Our Methodology
To compile our list of the largest recipients of foreign aid, we began by shortlisting 25 countries with regular foreign aid receipts and small to medium population sizes. This approach allowed us to identify nations with significant per capita foreign aid, even if their total lump-sum foreign aid was not as large. Using the OECD’s “Geographical Distribution of Financial Flows to Developing Countries 2023: Disbursements, Commitments, Country Indicators” Report, we pinpointed countries receiving the highest per capita foreign aid. The comprehensive report explores financial interactions between developed and developing nations to offer a thorough understanding of global foreign aid distribution. We specifically focused on the category ‘Net Disbursements Of ODA (Official Development Assistance) From All Sources Combined (USD million)’ to determine the global foreign aid amounts. We extracted data for these 25 nations from 2017-2021 from the OECD report and then divided their total foreign aid by their populations for those years. This step allowed us to determine the per capita aid for each country over the 5-year period. By averaging these individual figures, we got our final rankings. Additional sources consulted for this study included the World Bank, Development Initiatives, and the World Economic Forum, among others.
Based on our findings, here are 25 countries with the highest per capita aid inflow:
25. Mauritius
Average Per Capita Foreign Aid Received Between 2017-2021: $115
Mauritius was once largely reliant on sugar exports but has diversified its economy over recent decades toward textiles and tourism. Currently, the country’s per capita GDP is $10,216, prompting one to wonder why it would need foreign aid. According to the Borgen Project, foreign aid to Mauritius is used to secure future democratic peace and stability in Mauritius and, more broadly, throughout Africa. Given its small size and insular nature, Mauritius faces rising sea levels and other environmental challenges, necessitating international assistance.
24. Belize
Average Per Capita Foreign Aid Received Between 2017-2021: $127
Belize has a coastal economy that often faces the wrath of climate-induced adversities, such as hurricanes. Therefore, foreign aid to the Central American nation mainly focuses on disaster relief, environmental conservation, and sustainable growth. Also, poverty and underdevelopment in certain regions have led to international support, which currently stands at $127 per capita.
23. Moldova
Average Per Capita Foreign Aid Received Between 2017-2021: $147
Moldova, situated between Romania and Ukraine, ranks 1st among the Poorest Countries in Europe, with a current GDP of $440 per adult. The nation’s political and economic challenges stem from the post-Soviet transition, making it a significant recipient of foreign aid. Assistance mainly targets institutional reforms and governance since Moldova’s position frequently places it amidst East-West geopolitical tensions.
22. South Sudan
Average Per Capita Foreign Aid Received Between 2017-2021: $176
The world’s youngest nation ranks high among the most aid-dependent countries due to its alarming food insecurity. Continued strife and civil unrest have created a dire humanitarian crisis in South Sudan. As a result, foreign aid to the country focuses on addressing food scarcity and supporting internally displaced populations.
21. Timor-Leste
Average Per Capita Foreign Aid Received Between 2017-2021: $182
Once under Portuguese and Indonesian rule, Timor-Leste gained its independence in 2002. Although this young nation is rich in natural resources, it struggles with the challenges of nation-building and has a per capita GDP of $2358. Foreign aid to Timor-Leste is geared toward meeting its developmental needs, including health, education, and infrastructure.
20. Kosovo
Average Per Capita Foreign Aid Received Between 2017-2021: $231
Kosovo is the 3rd poorest country in Europe in terms of per capita GDP, which stands at $6512. The country declared independence in 2008 after emerging from a tumultuous history marked by the Yugoslav wars. Foreign aid is pivotal to its nation-building as it supports institutional development, justice sector reform, and economic stabilization.
19. Lebanon
Average Per Capita Foreign Aid Received Between 2017-2021: $233
Lebanon’s strategic significance in the Middle East is undeniable. However, political instability, regional conflicts, and a massive influx of refugees have stretched its resources thin. The country receives foreign aid to address these multifaceted challenges. The monetary aid focuses on supporting Syrian refugees, reconstructing areas affected by events like the 2020 Beirut explosion, and facilitating economic stability.
18. Fiji
Average Per Capita Foreign Aid Received Between 2017-2021: $258
Fiji, an archipelago in the Pacific, faces vulnerabilities due to climate change, particularly from cyclones and rising sea levels. Therefore, ODA (official development assistance) from developed countries is crucial for the island nation’s climate adaptation and mitigation measures. As Fiji seeks to diversify its tourism-centric economy, international support bolsters its agriculture, health, and education sectors to ensure steady growth.
17. Maldives
Average Per Capita Foreign Aid Received Between 2017-2021: $264
The Maldives, another island nation, wrestles with the repercussions of climate change. Heavy rains often result in floods, and rising sea levels threaten the country’s very existence. Although the Maldives doesn’t require assistance with hunger relief, given its per capita GDP of $11817, most foreign aid is allocated to enhance its climate resilience.
16. Jordan
Average Per Capita Foreign Aid Received Between 2017-2021: $275
Jordan has consistently demonstrated remarkable resilience, hosting refugees from neighboring conflicts and enduring the challenging living conditions prevalent in neighboring countries like Iraq and Syria. As a result, the nation’s socioeconomic fabric is strained by the influx of refugees (it has the second-highest number of refugees per capita). Consequently, foreign aid becomes essential for Jordan to support these refugee communities, alleviate water scarcity issues, and ensure stability amidst a tumultuous regional landscape.
15. Sao Tome and Principe
Average Per Capita Foreign Aid Received Between 2017-2021: $281
Sao Tome and Principe, with a per capita GDP of $2404, finds 15.6% of its population surviving on less than $2.15 a day. Located off the Central African coast, the small island nation is renowned for its cocoa production but combats economic vulnerabilities due to limited diversification. Foreign aid to Sao Tome and Principe targets agricultural practices and tackles public health concerns to enhance the quality of life for its residents.
14. St. Lucia
Average Per Capita Foreign Aid Received Between 2017-2021: $283
St. Lucia is located on the stunning Caribbean coastline and relies heavily on tourism. Foreign aid helps the country mitigate vulnerabilities associated with natural disasters (like hurricanes) and economic fluctuations.
13. Grenada
Average Per Capita Foreign Aid Received Between 2017-2021: $307
In the past, Grenada has experienced significant economic contractions following hurricane devastation. Its reliance on foreign aid primarily stems from the need for disaster recovery. Notably, under CBSI, Grenada receives counter-narcotics assistance from the United States. Alongside monetary aid, the US has also provided training and equipment to Grenadian security forces.
12. Solomon Islands
Average Per Capita Foreign Aid Received Between 2017-2021: $391
Australia stands as the main development partner of the Solomon Islands, having provided over $100 million to the country between 2021-2022 as ODA. This aid enhances connectivity between the islands, expanding educational outreach and bolstering the health infrastructure to be more prepared for emergencies.
11. Syria
Average Per Capita Foreign Aid Received Between 2017-2021: $501
The dire conditions in the Syrian Arab Republic are widely recognized. Consequently, the country receives substantial foreign aid from entities like the EU, Turkey, the UK, and OECD DAC (Development Assistance Committee) members. The nation’s infrastructure, economy, and societal fabric have been severely damaged, especially after the start of the civil war in 2011. The recent earthquakes have further worsened Syria’s challenges, positioning it among the most severe humanitarian crises. Foreign aid to Syria predominantly supports displaced communities and regions affected by war.
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Disclosure: None. 25 Countries That Receive The Most Foreign Aid Per Capita is originally published at Insider Monkey.
