Workshop 4 / GRM 2024
Foreign Aid and the Gulf States

Abstract

In February 2018, the Kingdom of Saudi Arabia, Kuwait, United Arab Emirates (UAE) and Qatar pledged $ 4 billion in the form of loans, grants, and investments to reconstruct Iraq (Chmaytelli & Hagagy, 14 Oct 2018). The same year, Saudi Arabia and UAE provided a grant of $ 930 Million to the UN for its humanitarian operations in Yemen and promised $ 2.6 billion more for the year 2019. A study by the World Bank in 2010 shows that Kuwait, Saudi Arabia, and the UAE have provided generous aid financing over the years (Rouis, 2014). In fact, the combined net of Official Development Assistance (ODA) from Kuwait, Saudi Arabia, and UAE almost doubled on yearly average during the global financial crisis (2008-2010) and doubled again since the Arab unrest in 2011. It reached a record in 2014 at $ 19 billion (Rouis & Shomakhmadova, 2018). The total ODA from those three countries also increased significantly as a share of Gross Domestic Income (GDI) reaching an average of 0.8 percent during 2011-2015. This is higher than the 0.3% of the Development Assistance Committee (DAC) for the same period and of the United Nation’s target of 0.7% that had been set since five decades (Riddell, 2007). Unlike the foreign aid from OECD countries, most of the aid from the Gulf States is provided in the form of grants (90%) and is not conditionality attached. Even when the oil prices dropped from $ 106/barrel to $ 53/barrel in 2014, foreign aid did not shrink from the UAE and Kuwait (Rouis, 2018). Reports on foreign aid from KSA, UAE, Qatar, and Kuwait have started to be published only recently. For example, the UAE was the first country in the GCC to publish its report on foreign aid in 2010 and it became a Development Assistance Committee’s (DAC) participant in 2014 (AlMezaini, 2012). The KSA has started to publish detailed reports on its foreign aid since 2016 (SAMA, 2016). Aid provided by these states is mainly for development and humanitarian purposes. It is delivered to recipient countries bilaterally or through eight regional financial institutions (see their websites below). However, the orientation of aid from the Gulf donors is, to a great extent, dictated by political objectives that go in form of humanitarian and developmental aid. Since the 1970s, Gulf donors have provided a significant amount of aid to Arab countries. In fact, most of the Gulf’s aid goes to Arab countries. This has led to the politicization of aid. However, during the 1980s due to criticism, the distribution of aid from the Gulf States began to include countries from outside the Arab region. Nonetheless, looking at some of the existing statistics, Arab countries remain the main beneficiaries of financial support from the Gulf. This is also due to the influence of Arab nationalism, religion, and political interests in the region. For example, Egypt received $ 30 billion between July 2013 and December 2016, while Yemen has received $ 4.7 billion during 2012-2014 (Rouis & Shomakhmadova, 2018). However, a close scrutiny at the sources, beneficiaries and sectors shows a changing pattern. Most of foreign aid is currently provided bilaterally. This leads each donor’s country to determine their aid objectives. However, because the data on foreign aid provided by GCC countries became available only recently, it has not been used to examine the impact of their aid on recipient countries in terms of poverty reduction, relief, and the contribution to their social and economic development. Similarly, the GCC’s motivations of foreign aid and its effect on the recipient countries’ stability are also under-researched. Against this backdrop, this workshop is intended to contribute to filling the abovementioned gap in the literature. Its main goal is to document the GCC foreign aid and to empirically examines its impact on the recipient countries and to compare it with the findings of literature on foreign aid provided by DAC countries. In addition, it seeks to examine how aid from the Gulf States became a vital tool to exert power and influence since the Arab Uprisings in 2011 as aid has played a significant role in changing the regional dynamics.      




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Workshop

Directors


Dr. Mohammad

Yaghi

Research Fellow and Programme Manager Gulf region politics and social transformation; Social and Islamic movements; and Middle East Politics
Konrad-Adenauer-Stiftung - Regional Gulf States Programme



Dr. Silvia

Colombo

Senior Research Fellow, Mediterranean and Middle East Programme -
International Affairs Institute



Hanaa

AlMoaibed

Visiting Research Fellow -
LSE Middle East Centre


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