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Monday, 1 August 2011

What is foreign economic trade and discuss the main sources of foreign loan? and discuss the international financial institutions which provide loan

Foreign Economic Aid :-
Foreign economic aid is the flow of resources and technical assistance from a developed countries to less developing countries. The loan is provided to meet the gap between domestic savings and investment. Various international institutions like ZMF, IBRD, IDA, IFC are also providing loans.
Foreign loan is provided by one government to other government or through international institutions.
Following are the main international institutions :

1. The Colombo Plan :-
It provides technical assistance to the South East Asian countries. The development assistance is provided by U.S.A, U.K. Canada, Japan etc.

2. IBRD :-
It is also called World Bank. It is providing long term loans to more than 124 countries. It provides the loan for electricity water supply and rail roads etc.

3. United Nations Agencies (UNA) :-
It provides long term loans, grants and specialist services to the less developed countries. It provides assistance through its various specialized agencies.

4. The Agency for International Development :-
It is the aid subsidiary agency a World Bank to provide infrastructure facilities. It provides the loan for long term. The loan is repaid in the local currency.

5. The International Finance Corporation :-
The IFC is also subsidiary agency of World Bank. It provides the loan to private enterprises in various countries.

6. Aid From Socialist Countries :-
The socialist countries are also helping the non-socialist countries. It provides the loan for various projects.

7. Islamic Development Bank (IDBI) :-
It was set up in 1975. It has 40 Muslim countries. It is helping the Muslim countries according the principles of Shariah. It is playing very effective role in improving the economic condition of Muslim Countries.

8. The Organization of Petroleum Exporting Countries :-
It is providing loans to various countries of various projects. It has also provided loan most of underdeveloped countries for the development projects.

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