Abstract

Cumulative bilateral concessional assistance from Arab donor countries to developing countries from 1973 to 1989 amounted to $73.4 billion. The geographic distribution of this aid is given in Table 22 and the percentage shares in Table 23. It must be noted that the geographic distribution of about 23 percent of the total is unknown, essentially because Saudi Arabia does not publish a geographic breakdown of a large part of its aid flows. Nevertheless, based on partial information, certain salient features emerge. Between 1973 and 1989, $44.3 billion of the identified cumulative net disbursements went to Arab countries. Their share of the total reached a peak of 81 percent in 1977 and averaged 60 percent over the period.

Cumulative bilateral concessional assistance from Arab donor countries to developing countries from 1973 to 1989 amounted to $73.4 billion. The geographic distribution of this aid is given in Table 22 and the percentage shares in Table 23. It must be noted that the geographic distribution of about 23 percent of the total is unknown, essentially because Saudi Arabia does not publish a geographic breakdown of a large part of its aid flows. Nevertheless, based on partial information, certain salient features emerge. Between 1973 and 1989, $44.3 billion of the identified cumulative net disbursements went to Arab countries. Their share of the total reached a peak of 81 percent in 1977 and averaged 60 percent over the period.

Arab Middle Eastern countries received $27.5 billion, or 37.5 percent of the total. The Syrian Arab Republic was year after year the largest single recipient (except for 1988–89), having received nearly $12 billion, equivalent to a little more than 16 percent of total contributions and 43 percent of the assistance extended to Arab Middle Eastern countries. The second largest recipient within that group, and the first in 1988–89, was Jordan ($8.4 billion), followed by the Yemen Arab Republic, Oman, Bahrain, Lebanon, the People’s Democratic Republic of Yemen, and very small net contributions to Iraq.

Arab countries in Africa benefited from a little more than $15 billion in cumulative aid flows (20.7 percent of total). The largest recipient within that group was Egypt ($6.4 billion), essentially because of very large payments extended to it during 1973–79, before Arab donors broke relations with it in the wake of the Camp David agreement. The next largest recipients in order were Morocco, the Sudan, Mauritania, Somalia, Tunisia, and Algeria.

Non-Arab countries received about 22 percent of the total identified aid flows. Nearly two thirds of it went to Asia (including Oceania) with a total of nearly $8 billion. The number of beneficiary countries in Asia grew from about 10 in the 1970s to a total of 23 in the period under study. The largest Asian recipient was Pakistan ($1.8 billion), followed by Bangladesh ($0.8 billion) and India ($0.5 billion). About $3.6 billion (5 percent of total) benefited sub-Saharan Africa. The relatively low level of aid to non-Arab Africa is essentially explained by the low absorptive capacity in most of those countries. Nonetheless, the number of recipients increased from about 25 countries in the 1970s to 40 countries by end-1989, and sub-Saharan Africa’s share of aid grew from an average of about 2 percent between 1973 and 1979 to an average of about 8 percent between 1980 and 1989, reflecting a growing emphasis on channeling aid to the least developed and most seriously affected countries. Smaller amounts were directed to Europe, of which Turkey took the lion’s share, and to the Western Hemisphere.

Concessional Assistance from Arab Multilateral Institutions

Concessional assistance extended by Arab multilateral institutions cumulatively between 1973 and 1989 amounted to $5.3 billion (Table 16). The geographic distribution is provided in Table 24 and the percentage breakdown in Table 25. Between 1981 and 1985, about 10 percent of the funds disbursed is unaccounted for, because the geographical distribution of AGFUND’s disbursements is unavailable. However, AGFUND distributed humanitarian aid to a large number of countries (a total of 117 by end-August 1989), hence not amending significantly the analysis given below.

More than 66 percent of cumulative disbursements went to Arab countries. Because of very large payments extended by GODE to Egypt between 1976 and 1978 and, to a lesser extent, relatively large payments to the Sudan in certain years, Arab countries in Africa absorbed three quarters of the multilateral aid directed to Arab countries, with the remainder benefiting the Arab Middle East.

The People’s Democratic Republic of Yemen, the Yemen Arab Republic, and the Syrian Arab Republic received nearly three quarters of the multilateral aid going to Arab Middle East countries. As mentioned, Egypt received the lion’s share of net flows extended to Arab Africa, followed by the Sudan, Mauritania, Somalia, and Morocco.

About one third of the aid extended by Arab multilateral institutions was directed to the non-Arab world and tended to be spread over a large number of countries. Because most of those institutions give priority to the poorest countries, and because some of the organizations are preoccupied solely with aid to Africa, sub-Saharan Africa got the largest part, receiving slightly less than $1 billion, or about 18 percent of the total flows extended by these institutions. A total of 42 non-Arab African countries benefited from this aid, the largest among which were Tanzania, Senegal, Burkina Faso, and Madagascar.

The second largest group of beneficiaries was Asia and Oceania, which has 19 countries. The largest recipient was Bangladesh, which received about one fourth of all aid directed to Asia, followed by India, Pakistan, Thailand, Burma, and Sri Lanka. Smaller contributions were made to 17 Western Hemisphere and 3 European countries, with Turkey the major recipient in Europe.

Total Concessional Arab Assistance

The geographic distribution of total concessional Arab assistance, given in Table 26 with the percentage breakdown in Table 27, is heavily influenced by bilateral net disbursements, which make up 93 percent of the total. As mentioned above, the geographic distribution of about 20 percent of the total is unknown.

Nearly $48 billion, or 61 percent of the total flows, were directed to Arab countries, of which Arab Middle East countries received $28.2 billion (35.8 percent of total) and Arab Africa $17.9 billion (22.7 percent of total), with $1.7 billion (2.2 percent of total) directed to Arab countries unspecified. Among the Arab countries, the Syrian Arab Republic, Egypt, and Jordan were by far the largest recipients. Among non-Arab countries, Asia and Oceania received the largest share, followed by sub-Saharan Africa, Europe, and the Western Hemisphere.

Bilateral Nonconcessional Assistance

Identified bilateral nonconcessional development assistance from Arab donors from 1973 through 1989 totaled $8.7 billion. Its geographical distribution is presented in Table 28 and the percentage breakdown in Table 29. No breakdown is available for 1988 and 1989.

A little more than $5 billion, or 59 percent of the total, was directed to Arab countries, 60 percent of which was absorbed by Arab Africa and the remaining 40 percent by the Arab Middle East. The largest recipients in the latter group were Iraq, Bahrain, Jordan, and the Syrian Arab Republic. Roughly one third of the assistance extended to Arab Africa benefited Egypt, essentially because of large payments in 1974 and 1975. Another 30 percent went to the Sudan, followed by Morocco, Mauritania, Tunisia, Algeria, and Somalia.

Among the non-Arab beneficiaries, the largest share went to the Western Hemisphere, essentially because of some large loans to Brazil in the early 1980s. The second largest recipient was Europe, consisting for the main part of relatively large loans to Yugoslavia and Turkey. Next followed Asia, nearly half of which consisted of assistance extended to Pakistan, and finally, sub-Saharan Africa. The low share of the latter reflects the fact that many African countries are among the least developed, and benefited essentially from concessional aid.

Nonconcessional Assistance from Arab Multilateral Institutions

Nonconcessional multilateral Arab assistance, at $2.2 billion between 1973 and 1989, is relatively small. The bulk of it consists of trade financing by the Islamic Development Bank and the various loan facilities of the Arab Monetary Fund. Given that those institutions extend financing to their country members only, 84 percent of nonconcessional multilateral Arab assistance was directed to Arab countries; about 30 percent of that total was directed to the Arab Middle East and about half to Arab Africa (Table 30 and percentage breakdown in Table 31). In the former group, Iraq, the Syrian Arab Republic, and Jordan were the main beneficiaries, and in the latter, the Sudan, Algeria, Morocco, and Tunisia. Among the non-Arab countries, sub-Saharan Africa was the largest recipient, with about 20 African countries benefiting from this assistance, the main ones of which were Niger, Senegal, Cameroon, and Guinea. The second group was Europe, all of which went to Turkey, followed by the Western Hemisphere and very small net disbursements to Asia/Oceania (but with relatively large disbursements to Pakistan).

Total Official Assistance

The geographic distribution of total official assistance from Arab countries and institutions is given in Table 32, with the percentage breakdown in Table 33. As mentioned earlier, the geographic distribution of about 20 percent of the total is unknown.

A cumulative $54.7 billion or 61 percent of the total net disbursements was directed to Arab countries. Arab Middle East countries received a little more than $30 billion (about 34 percent of the grand total), the main beneficiaries of which were the Syrian Arab Republic ($12.3 billion), Jordan ($8.9 billion), the Yemen Arab Republic ($2.9 billion), and Bahrain ($1.8 billion).

Arab countries in Africa benefited from about $22 billion (25 percent of the grant total). Egypt, with $9.4 billion, was by far the largest beneficiary. Second in line was Morocco ($4.2 billion), followed by the Sudan ($3.9 billion), and Mauritania ($1.4 billion), with smaller contributions to Somalia, Tunisia, and Algeria.

Non-Arab developing countries received $17.7 billion of the identified flows (20 percent of the total). Asia, including Oceania, absorbed more than half of this, followed by sub-Saharan Africa, Europe, and the Western Hemisphere.

Sectoral Distribution of Arab Aid

Bilateral Aid

The sectoral distribution of bilateral aid by Arab donors is not precisely known, but has been dominated by nonproject general support assistance, often following decisions taken at Arab summit meetings. This consisted of balance of payments and budget financing, provided in most cases unconditionally to recipient countries. Emergency relief and reconstruction aid following natural or other disasters have been the second largest category of nonproject assistance. In particular, the famine prevailing in certain parts of Africa has been of particular concern to Arab donors, and they have devoted considerable efforts to alleviate it. Oil credits in cash or in kind were important in the second half of the 1970s and early years of the 1980s, helping oil importing developing countries cope with the effects of the significant oil price increases at that time.

Most bilateral project assistance was extended through the national aid agencies. Infrastructure projects represented the most important part of those agencies’ assistance. Transport, communication, and storage represented the leading sector, followed by energy projects (electricity, oil, and gas). Agriculture and animal husbandry, which sensibly gained in importance in the latter part of the period under review, was the third largest sector. Next came industry and mining, water supply and sewerage services, and smaller contributions to tourism, education, training, health, and housing.

Multilateral Aid

The Arab multilateral organizations’ sectoral distribution differs markedly from one institution to another, because of the very different nature of the various institutions. Excluding the Arab Monetary Fund and GODE, which exclusively extended balance of payments assistance, the sectoral distribution is presented in Table 34.

Over the period 1973–89, the major portion of cumulative financing has been directed to the development of public utilities and other forms of infrastructure. Energy-related projects made up approximately one third of the total, essentially because the Islamic Development Bank placed heavy emphasis on projects to generate and transmit electricity and distribute gas, and because energy loans formed a large share of the OPEC Fund’s project financing (27 percent of its cumulative project loans up to end-1989). The second largest category (about one fifth of the total) was industry and mining, again because the industrial sector has been the major recipient of IDB financing, accounting for more than one third of its total ordinary operations.

Agriculture and animal husbandry, whose share grew over the years, was the third largest category overall, followed by transport, communication, and storage, and by water supply and sewerage services. Miscellaneous items, consisting essentially of balance of payments support and a gradually in-creasing share devoted to the social sector (education, health, and housing), made up about 12 percent of the total.

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