Manama: Arab states, the most generous in donations to global development, are expected to continue to play an important role in international assistance, a World Bank researcher has said.
"There is good reason to expect Arab aid to continue to play an important role in international development assistance into the foreseeable future," Mustapha Rouis said in Kuwait City as he presented a study published by the World Bank at the Kuwaiti foreign ministry.
"Arab donors have recently increased their aid volumes despite the severity of the global financial crisis and Arab financial institutions are well funded with the capacity to scale up assistance," he said, quoted by Kuwait Times on Saturday.
The study recognises that Arab aid, which has been relatively understudied, has played an important role in financing global development.
According to the research work that covers four decades of Arab states donations starting from the early 1970s, Saudi Arabia, Kuwait and the UAE have been among the most generous in the world, with Official Development Assistance (ODA) averaging 1.5 per cent of their combined gross national income between the years of 1973-2008.
The figure, more than twice the United Nations target of 0.7 percent, is five times the average of Organisation for Economic Co-operation and Development - Development Assistance Committee (OECD-DAC) countries.
Arab Official Development Assistance (ODA) accounts for 13 per cent of total DAC ODA on average and nearly three-quarters of non-DAC ODA. About one-third of all ODA during the 1970s came from Arab donors.
High levels of Arab ODA in the 1970s and 1980s were primarily a reflection of high oil prices and, to some extent, the substantial start-up costs associated with establishing aid programs and capitalizing development funds and banks.
The levels of Arab aid witnessed in the 1970s and early 1980s were exceptionally high by international standards and could not be sustained over time.
Fiscal space in donor countries has been reduced over time as a result of declining oil revenues and growing national spending on wages, transfers, debt service and social services for a growing population, the study said.
Aid levels have increased since 2002, both in volume and as a share of gross national income, as oil prices have risen and post-conflict reconstruction needs have expanded. As in the past, most aid comes from Saudi Arabia, Kuwait, and UAE, respectively.
In addition to government-to-government aid, Arab donors have established a number of specialized financial institutions to provide development assistance to an increasing number of developing countries across the world. For the past 20 years assistance through these countries has increased by more than four percent each year.
According to the study, Arab donors have, over time, expanded their reach beyond just Arab or predominantly Muslim countries and infrastructure development. Currently, Arab ODA covers a large and wide range of countries, including poor countries in sub-Saharan Africa such as Mali, Mauritania, Senegal, Somalia, and Sudan and in Asia such as Cambodia, Bangladesh, Nepal, Pakistan, Sri Lanka, Tajikistan, and Vietnam.
The Kuwait Fund for Economic Development, the Saudi Fund for Development and the OPEC Fund for International Development are the most global in focus, financing projects in Europe and Latin America.
ODA flows to several developing countries such as Syria, Morocco, Yemen and Jordan to name a few. The sector focus of Arab ODA has broadened over time to include agriculture, health, education and social services.
