Pete has the benevolent benefactor approach, which argues that it's rude not to be generous when we are so lucky. The other point of view argues that this is naive, and only creates or encourages cycles of dependance. Having worked in international development for the past few years, I know all the arguments about supporting projects that have a long term goal, whether it be microfinance for sustainable livelihoods or educational opportunities for children.
I do support these initiatives, but it doesn't stop some people falling through the cracks and coming up to me asking for money. I have realised that whether I choose to give or not I won't make a significant difference to that person's past or future. But I can respond with respect and integrity to the humanity of the person and maybe change their outlook for that day. The best part of this trip has been the people and the unexpected adventures. Rather than jumping from air conditioned bus to air conditioned hotel, I have found myself amidst it all - haggling for a better price, joining in a game of backgammon, picking up a bit of arabic and being led astray in the local souq (markets).