Arab donors, predominately the Kingdom of Saudi Arabia, Kuwait and the United Arab Emirates (UAE) have been among the most generous in the world, with official development assistance (ODA) averaging 1.5 percent of their combined gross national income during the period of 1973 to 2008, the World Bank said in a report. This is more than twice the United Nations target of 0.7 percent and five times the average of the Organization of Economic Cooperation and Development (OECD)-Development Assistance Committee (DAC) countries, the report added. The new report titled “Forty Years of Development Assistance from Arab Countries” said that over the past four decades, Arab aid, which has been relatively under-studied, has played an important role in global development finance. The figures showed financial aid by all Arab donors accounted for nearly 13 percent of the total official aid provided by the OECD's Development Assistance Committee (DAC) on average and nearly three-quarters of non-DAC aid. “The share of Arab official development assistance (ODA) in Arab gross national income was exceptionally high in the 1970s and early 1980s, peaking at over 12 per cent for the UAE and at about 8.5 percent for Kuwait and Saudi Arabia in 1973,” the report said. The report also showed that nearly one-third of all ODA during the 1970s was from Arab donors. Although the ratio has fallen over time, it still exceeds the average among OECD-DAC member countries, it said. “Moreover, Arab aid is generally untied, and is offered without conditions or restrictions. Over time, Arab donors have expanded their reach-beyond Arab and predominantly Muslim countries in terms of recipient countries and beyond infrastructure in terms of sectors. Since 2002, aid levels have increased, both in volume and as a share of gross national income due to oil prices have risen and post-conflict reconstruction needs have expanded, and therefore, most aid came 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. The assistance through these institutions increased substantially by over 4 percent per year in real terms over the past 20 years. Over time, Arab donors have expanded their reach in terms of recipient countries, beyond Arab and predominantly Muslim countries, and in terms of sectors, beyond infrastructure. The study noted that at present, the Arab official financial assistance covers a wide range of nations, especially 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 (OFID) are the most global in focus, also financing projects in Europe and Latin America. OFID is not exclusively a Arab-financed institution, but Arab countries provide the largest share of funding. Arab aid has played a major role in total 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. The World Bank report said that there are good reasons to believe that Arab aid will continue to play an important role in international development assistance into the foreseeable future. Arab donors have recently increased their aid volumes despite the severity of the global financial crisis; and Arab financial institutions are well capitalized, with the capacity to scale up assistance, the report added.
