The Impact of External Financing in the Economy of Developing Countries "Jordan is a Model"

Abstract

This study aimed to explain the resorting to developing countries to external financing. It also aimed to presenting and analyzing the intellectual dialectic between the traditional and modern schools on the feasibility of external financing to developing countries. It also aimed at trying to assess the impact of external financing on the economies of developing countries and tracking the development of foreign aid to Jordan and its impact on the Jordanian economy as a case study. To achieve these objectives, the researcher used analytical descriptive method, which is based on accurate characterization of the economic phenomena and then quantitative analysis. The evolutionary method of external financing and its forms was also adopted.

               The study found that foreign direct investment (FDI) to developing countries in general is a necessary evil; these countries cannot maintain closed economies in the light of contemporary global economic developments. And that global capitalist hegemony has brought and continues the calamities and woes and the great exploitation of developing countries. In order to save the developing countries as well as Jordan from the vicious circle of asking for new loans to repay the installments and benefits of old loans, it is necessary to focus on the issue of the specificity of each developing country and its conditions and level of development. This needs to be accompanied by administrative, political and constitutional reforms, rather than imitating the experience of developed countries to achieve their development.