Arab development assistance – Four decades of cooperation – World Bank report (excerpts)

Arab Development Assistance

FOUR DECADES OF COOPERATION

Executive Summary

This study provides an overview of Arab official development assistance (ODA) over the past four decades. Trends in volume, composition, and direction are discussed in Chapter 2 and the institutional framework is discussed in Chapter 3. Over 90 percent of Arab development assistance is provided by three countries: the Kingdom of Saudi Arabia (KSA), Kuwait, and the United Arab Emirates (UAE).

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Arab aid has played a major role in total ODA flows to some countries. In Syria, Arab ODA accounts for over 70 percent of total ODA from all sources. In Morocco, Lebanon, Yemen, and Jordan, Arab ODA represents between 20 and 40 percent of total ODA. Arab ODA also accounts for 10–20 percent of total ODA in West Bank and Gaza, Somalia, Sudan, Turkey, Egypt, Mauritania, and Djibouti.

CHAPTER 2

Overview and Trends in Arab

Official Development Assistance

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Political and security issues have also influenced the allocation of Arab ODA to specific countries. At the 1974 Arab Summit Conference in Rabat, Morocco, oil exporting Arab countries agreed to extend support to Egypt, Jordan and Syria, each of which was absorbing a large number of refugees from West Bank and Gaza. Between 1975 and 1979, over US$15 billion (in 2007 prices) in Arab aid was granted to Egypt (though aid was halted after the 1978

Camp David Accord that led to the signing of the 1979 peace treaty between Israel and Egypt). At the 1978 Arab Summit in Baghdad, an agreement was reached to provide an annual grant of US$ 3.5 billion to the front-line states bordering Israel (Egypt, Jordan, Syria, and Lebanon). Low levels of aid in

the late 1980s and early 1990s also reflected the reflows of principal payments of aid loans extended in the previous years, as well as heavy military expenditures due to regional conflicts and the cessation of large amounts of general support to Jordan and Syria pledged under the 1978 Arab Summit.¹⁴ Reconstruction needs in Kuwait and the fiscal strains in KSA following assistance provided to allies in the 1990–91 Gulf War contributed to a drop in aid from the three main Arab donors up to the mid-1990s.

Recent increases in Arab ODA have been influenced by the urgent need for post-conflict reconstruction. The countries of the Gulf Cooperation Council (GCC)¹⁵ have supported the reconstruction of Lebanon following the 2006 war; Afghanistan, Iraq, and Yemen after the 2006 Consultative Group meeting; and Gaza after the 2009 incursion.  …

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RECIPIENTS AND USES

… The Palestinian Authority is now the largest Arab ODA recipient, but it was not one of the top ten ODA recipients in the 1990s.

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Institutional Framework for Arab

Financial Assistance

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STRATEGIC ORIENTATION OF ARAB

FINANCIAL ASSISTANCE INSTITUTIONS

A. Institutions

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The League of Arab States (LAS) has also come to play a more prominent role in coordinating assistance for humanitarian affairs. Though traditionally focused on coordinating assistance for West Bank and Gaza, LAS has turned its attention recently to a number of other crises.²⁷

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¹⁴ Van den Boogaerde (1991)

¹⁵ The GCC was established in May 1981 in Riyadh, Saudi Arabia, and comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia,

and UAE.

²⁷ In 1993, the Council of the Arab League passed a resolution committing its members to provide assistance to Somalia. More

recently, league members have committed assistance to overcome humanitarian crises in Afghanistan, Iraq, and Sudan.

ANNEX 1

An Overview of Arab Financial

Institutions

Several Arab financial institutions have been created at the national, regional and international level to deliver assistance to developing countries more broadly.

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BILATERAL DEVELOPMENT FUNDS

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Arab Fund for Economic and Social

Development

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A large share of AFESD’s grants went to the West Bank and Gaza. Total development funding in the West Bank and Gaza over the period 1974–2007 reached KD 90.2 million, of which KD 76.2 million was in the form of grants. Since 2001, AFESD has allocated 10 percent of its yearly net income to the Palestinian Authority.

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From 1974 to 2007, 19 percent of AFESD grants were allocated to West Bank and Gaza, and 7 percent each to Lebanon, Egypt, and Sudan. Since 2001, AFESD has allocated 10 percent of its yearly net income and another 5 percent of its TA on a grant basis to the Palestinian Authority.

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