Loans for Developing India, Gains for Japan?

Abstract

Is it just good karma for developed nations to give aid to developing countries? Or is it actually good for their own development too? It is interesting to note that 95% of the United States’ top trading partners were, at one time, US aid or loan recipients. Today, 45 percent of all U.S. exports go to developing countries which also happen to be the largest beneficiaries of American loans. In this article I explore the benefit the aid giver receives from giving loans. While the article is primarily set in the context of Japan’s loans to India, the same can be said for many other similar transactions. Also by no way do I intend to demean the loans that Japan gives to India nor do I intend to attribute any ulterior motives for these. It is an undeniable fact that some of the best development work in India has happened due to Japanese loans.