Saudi aid to developing countries totals $75.5b

Saudi Arabia has given $75.5 billion as assistance to developing countries, especially in Africa, during the past quarter of a century. This constitutes around 4 per cent of the country's GDP.

These loans were disbursed by the Saudi Fund for Development (SFD), established in 1974 to provide soft loans to finance development projects in developing countries.

The fund also oversees implementation of some grants extended by the government. The SFD has so far extended soft loans to the tune of $6 billion for financing 330 projects in 63 countries. Overall Saudi assistance has benefited 73 countries: 41 African, 23 Asian and nine other developing states.

Multilateral channels for Saudi aid included the World Bank and its affiliates, the Opec Fund and Arab regional financing agencies.

According to the country's Eastern Province Chamber of Commerce and Industry, SFD began operation with an initial capital of around 10 billion riyals, which was later increased threefold.

The first increase was in 1980 when the capital was raised to 15 billion riyals, second in the following year to 25 billion riyals and the third, ten years later in 1991 to 31 billion riyals.

Besides, the SFD has also played a significant role in the reconstruction of many countries such as Yemen, Algeria, Egypt, Lebanon, Turkey and Bosnia and Herzegovina to alleviate damages caused both by natural disasters and civil wars.

Focus has always been on the least-developed countries with high rates of population growth, unemployment and low income levels, and SFD has signed 203 loan agreements valued at 10.641 billion riyals with 39 African countries, representing 47 per cent of the total amount to fund 196 development projects.

Of the total amount assigned for loans, 51 per cent, or 11.364 billion riyals were given to 19 Asian countries to fund 128 economic projects and programmes.

For this, a total of 130 loan agreements were signed. Five countries in the other parts of the world were given 411 million riyals representing 2 per cent of SFD's total contribution.

The money was used to fund projects such as water supply and sewerage, education, housing and urban development and health besides assistance to manufacturing and mining sector and agriculture based industries.

The SFD has continuously pursued a policy of broadening the co-financing base, especially in Africa where cost of projects surpasses borrowing states' capabilities.

Of the 340 loan agreements signed since SFD's inception, 227 loans worth 14.591 billion riyals were jointly financed by national, regional and international financing institutions. In fact, co-financing constituted 65 per cent of the total loans.

Besides its principal task of extending loans, SFD oversees Saudi government grants to countries facing tough economic and environmental conditions, natural disasters and civil wars.

Under this programme, SFD supervised 32 grants extended by Saudi Arabia during 1978 and 2001 to the value of 8.345 billion riyals in 22 countries. Here too the African countries got the largest share as they received 2.850 billion riyals and six Asian countries 5.420 billion riyals, while Bosnia and Herzegovina was given 75 million riyals.

Saudi Arabia is also a member of multilateral development institutions such as the Arab Fund for Social and Economic Develop-ment, the Arab Monetary Fund, the Arab Bank for Economic Development in Africa, the Arab Cooperation for Investment Guarantee, the Arab Authority for Investment and Agricultural Development and the Arab Trade Financing Programme.