PoliticsSaudi Arabia's Aid To Developing Countries

Saudi Arabia's Aid To Developing Countries

Saudi Arabia's Aid To Developing Countries

The painful situation facing millions of people in third world countries as a result of the economic systems of the world has prompted Saudi Arabia to lead one of the strongest and most daring campaigns to bring the facts and dangers of the economic conditions faced by the developing countries to the attention of rich countries. In a more positive step, the Kingdom was the first country to launch a program of making most of its aid assistance to poor countries take the form of irrevocable funds. It also provided very easy terns for the development loans supplied to those countries.

The organizations and funds set up by the Saudi Government to carry out Saudi Aid Programs of this nature have played a significant role in assisting and providing emergency aid to developing countries, specially the Arab and Muslim countries. Those stances of Saudi Arabia were culminated by the statement made by King Fahd at the Islamic Summit of Dakar in 1991 announcing that Saudi Arabia has decided to write off all outstanding debts due to the Kingdom by members of the Organization of Islamic Conference. In 2000 Canada and many other western countries followed this example and forgave significant amounts of debt owed to it by third world countries.

Saudi Arabia has contributed to social and economic progress of more than 70 developing countries by providing resources to regional and international finance bodies: in the 20 years to 1995 the total of such assistance was around US$ 63.8 Billion.

In 1975, the Saudi Fund for Development was established as the main channel through which government financial assistance is delivered to developing countries. The main objective of the Saudi Fund is to participate in the financing of development projects in developing countries through granting loans to low income countries.

The emphasis is on development projects that promote the social and economic well being and prosperity of people. The loans granted by the Saudi Fund for Development to a number of countries throughout the world are made on easy, generous terms. Loans, in general and particularly to Sub-Saharan countries, have the following features:

1. Loans are made without restrictions, conditions or intervention on the part of the Kingdom in the affairs of the recipient countries.

2. They are paid out promptly and have a high degree of liquidity.

3. Maturity of loans may extend up to 50 years, with a grace period of 10 years, and a service charge (no interest) of only 1 or 2%.

4. The grant element of loans to Sub-Saharan countries represent more than 60% of the loan value.

During the period between 1975 and 1998, the Saudi Development Fund granted 305 loans to finance more than 305 Development projects in 63 developing countries.

In this context, the Kingdom has allocated about US$ 6 Billion in the form of soft loans to 39 countries in Africa,24 in Asia and other regions. The Kingdom development assistance programs benefited, during the past three decades, more than seventy developing countries in different parts of the world. It reached at times a ratio of more than 5% of the Kingdom's GDP, averaging as a whole around 3% of the GDP, thereby surpassing to a large extent the contributions made by the wealthy member countries of the Organization of Economic Cooperation and Development (OECD) in this regard.

In addition to its active participation in providing economic assistance to other developing countries through the Saudi Fund for Development and through its contributions in the capital of international financial institutions and the provision of loans, the Kingdom also grants direct economic assistance.The total contribution of the Kingdom to various fields of relief to alleviate the suffering and hardships accompanying disasters and catastrophes in a number of Islamic and non-Islamic countries reached, during the last few years, approximately US$ 4 Billion.

The Kingdom-based International Islamic Relief Organization (IIRO) spent $US 43.6 Million last year to support and finance 1477 projects and pro-grams, benefiting 24,640,257 people in 95 countries.

Saudi Arabian aid is offered in many areas, without drawing any benefits from such assistance or imposing any pressure on the receiving countries, and without having to intervene in their affairs or to grant them aid with strings attached. The most important portion of the Saudi aid program is a part dealing with grants for which Saudi Arabia allocates a fixed bi-annual amount of 55 million contributed to the World Food Program to help with the efforts for easing the world food crisis. The total funds provided by the Kingdom to the World Food Program since it was established in 1963 are estimated at US Dollars 598 million.

As part of his plan to promote World Peace and Security, King Fahd of Saudi Arabia has placed a high priority on further growing the strong relationship between Canada-Saudi Arabia. The Kingdom of Saudi Arabia has long been in a position of predominance in world political and economic affairs. As a leading Islamic nation in today's post-September I 1 th international environment, Saudi Arabia is seeing its position of influence grow even stronger. Indeed if one wants to see a an symbol of Saudi Arabia strength, style and influence, one needs to look no further than viewing its new embassy on Sussex Drive. Located within a few hundred metres of the Lester B. Pearson Building (Foreign Affairs) and just down the street from 24 Sussex, the new Embassy stands out with its distinct Saudi architectural look and design. The Saudi Ambassador will officially open the Embassy in the spring. One of the most prominent embassies in the capital, this building has been labelled an architectural must see in the capital.

Recently, Ottawa Life Magazine sat down with Dr. Mohammed R. Al-Hussaini, Saudi Arabian Ambassador to Canada and had a discussion about Canada-Saudi relations and much more about this ancient, dynamic and influential country.

Dr. Mohammed R. Al-Hussaini on Canada-Saudi-Relations

Saudi Arabia and Canada have enjoyed many years of close relations. We have many common interests and share several foreign policy objectives. Stability in the Middle East is fundamental to world peace and security. Saudi Arabia and Canada are both deeply committed to the United Nations policy of peaceful resolution of conflict in the region.

Dr. Mohammed R. Al-Hussaini on Trade

Saudi Arabia is Canada's major trading partner in the Middle East, but I believe strongly that more social contacts should be established between our two governments and peoples so that we can understand and appreciate each other more. In this regard, I quote the late Senate of Canada Speaker Gildas Molgat who wrote after his visit to Saudi Arabia:

The Saudis are a proud people, attached to their ancient traditions. They are warm and friendly, deeply religious, but also eager to increase their contacts with the West and Canada. It is only by personal contact and frank discussion that persons of different cultures can understand and appreciate the reasons for their differences. Our Senate delegation returned to Canada impressed by what we saw and heard, and honoured by the obvious goodwill we found towards Canada.

Dr. Mohammed R. Al-Hussaini on Foreign Aid

Saudi Arabia is one of the top foreign aid donors on the basis of per capita income. The Saudi Development Fund (SDF) is the main body for extending development aid and providing loans to help finance hundreds of projects in many countries.

The Kingdom has contributed to the social and economic progress of more than 70 developing nations, lending under easy and generous terms — US$63.8 billion since 1975 for 305 development projects. Maturity of these loans may extend up to 50 years, with a grace period of 10 years, and a service charge (no interest) of 1% or 2%.

The grant element of loans to Sub-Saharan nations represents more than 60% of the loan value. The Kingdom allocated US$6 billion in the form of soft loans to 39 African nations and 24 Asian countries. In some years, these development assistance programs accounted for 3% to 5% of the Kingdom's gross domestic product, surpassing the contributions made by wealthy member-nations of the Organization for Economic Co-operation and Development (OECD).

Dr. Mohammed R. Al-Hussaini on Debt Relief and Food Aid

The Kingdom's total contribution to relief efforts to alleviate the suffering and hardship caused by disasters — in both Islamic and non-Islamic countries reached US$4 billion in recent years. The International Islamic Relief Organization (IIRO) headquartered in Saudi Arabia spent US$43.6 million in 2001 to support 1,477 projects and programs benefiting 25 million people in 95 countries.

The most important aspects of the Saudi aid program are grants for which the Kingdom is allocating a fixed biennial amount of US$55 million, contributed to the World Food Program to help ease chronic food shortages. The total funds provided by the Kingdom for the World Food Program since it was established in 1963 come to about US$598 million.

This strong stand on aid programs culminated in King Fand's declaration at the 1991 Islamic Summit in Dakar (Senegal) that Saudi Arabia would write off all outstanding debts owed to the Kingdom by members of the Organization of Islamic Conferences.

Dr. Mohammed R. AI-Hussaini Economic Might/Oil Production

Saudi Arabia can afford to be generous. It possesses 26% of the world's known oil reserves, some 260 billion barrels. Huge natural gas reserves total about 253 trillion cubic feet. The Kingdom's commanding position in world oil production allows it to exercise a stabilizing influence on global energy prices. Saudi Arabia now produces about 11% of the world's daily oil supply. Paradoxically, the Kingdom is in the forefront of energy conservation and the development of alternatives to fossil fuels. Research in solar energy is at an advanced stage in Saudi Arabia, where the world's largest solar-generated electrical system is now in operation.

The liberalization measures that are being introduced will help to develop the latent skills and talents of Saudi citizens and encourage foreign investment. The Kingdom is also adopting some foreign management techniques in its business practices. New tax breaks will encourage foreign companies to train Saudi employees. The reform package is designed to raise the standard of living across the Kingdom.

Dr. Mohammed R. AI-Hussaini on Saudi Arabia

Saudi Arabia has emerged from the desert to become a dynamic modern nation without losing its social, cultural, moral and religious values. Respect for private property and encouragement of private investment in the nation's development is principles upheld by the Kingdom. The Crown Prince himself founded the Jenadriyah Heritage and Culture Festival, which is held annually and attracts visitors from all over Saudi Arabia, with hundreds of foreign guests invited to take part in literary events and festivals of song and dance.


By: Dr. Mohammed R. Al-Hussaini

Ambassador of the Kingdom of Saudi Arabia to Canada  

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