Arab Development Assistance : Four Decades of Cooperation

Abstract

Over the past four decades, Arab aid, which has been relatively under-studied, has played an important role in global development finance. Arab donors- predominantly the Kingdom of Saudi Arabia (KSA), 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 (GNI) during the period 1973-2008, more than twice the United Nations target of 0.7 percent and five times the average of the Organisation For Economic Co-Operation And Development (OECD)- Development Assistance Committee (DAC) countries. In addition to government-to-government aid, Arab donors have established a number of specialized financial institutions to provide development assistance to low-income countries. Assistance through these institutions increased substantially by 4.4 percent per year in real terms over the period 1990-2008. 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, and Arab financial institutions are well capitalized, with the capacity to scale up assistance.