In the Lead

In the world of international development aid the major players are the United States, the European Union, and Japan. The bulk of funds distributed and training programs implemented in developing countries in Africa, Asia, and Latin America originate from there, with smaller though still significant contributions made by countries such as Canada and Australia. 

Aid flows from Arab countries to the developing world are minimal, although for several decades there has been a major exception to this: Kuwait. The Kuwait Fund for Arab Economic Development was started in 1961. Robert McNamara, President of the World Bank from 1968 through 1981 described its exceptional mandate and origins:

When first established in 1961, the Kuwait Fund was without precedent. Here was Kuwait, a tiny country, until recently among the poorest places on earth, establishing a development fund in the year of its political independence. While welcoming its new-found prosperity it was declaring a willingness to share its future wealth with its Arab neighbours.

In 1974 the Kuwait Fund expanded its role to include the entire developing world, not only the Arab world.  The overwhelming majority of the Fund’s capital is dedicated to loans, some of which are used by developing countries to contract Kuwaiti companies in the planning and construction of major infrastructure initiatives such as the recent construction of Ethiopia’s modern Addis Ababa Bole International Airport. A far smaller percentage of the Fund’s resources have been devoted to grants and technical assistance.

This makes the Kuwait Fund’s mission and programs different from aid agencies such as US AID (The US Agency for International Development) and Britain’s DFID (Department for International Development) which devote large percentages of their aid flows to grants rather than loans. The Kuwait Fund rarely supports grassroots community development to combat poverty, human rights promotion and the cultivation of democratic values, and education provision which are major areas of emphases of American and European aid agencies. Its annual report explains its emphasis on large-scale infrastructure, “such as transport, telecommunication, agriculture, energy, industry and water and sewage sectors.” Its prioritization of such large scale infrastructure projects closely mirrors that of the World Bank.

Indeed it is unclear if the Kuwait Fund meets the criteria of offering "Official Development Assistance" which is defined by the Development Assistance Committee of the Organisation for Economic Cooperation and Development as conveying “a grant element of at least 25%.” Salil Shetty, the director of the UN’s Millennium Campaign to halve poverty and boost life expectancy by 2015, has urged wealthy Arab states to give more development aid. In an interview in Qatar in November of 2008 he stated, "If Gulf States are serious, let’s have some cash down… They’re doing more in terms of helping Islamic countries, which is a good starting point… I think they need to step up a lot more than they have and they need to become part of the global process because right now they’re kind of isolated. They’re not part of the mainstream discourse and they need to get there."     

Shetty noted that it’s hard to know just how much Gulf States are contributing to development because they do not make this information public and they are not part of the OECD’s Development Assistance Committee, which tracks statistics on aid flows. Shetty criticized Gulf States, stating, “We don’t get clear numbers, it’s very opaque. There needs to be more transparency.” In this regard the Kuwait Fund—though not without its own weaknesses because so little of its funds actually qualify as development assistance—seems to release more data about its exact aid flows than Qatar, the UAE, and Saudi Arabia. Its website includes detailed information available to the general public including project budgets.

Like all government based development agencies, the Kuwait Fund both expands economic and political opportunities for Kuwait through its development efforts while simultaneously seeking to improve the welfare and promote the capacity building of developing countries. Its aims are both charitable and promote the nation’s interest.  As Dr. Mohammed Sabah Al-Salim Al-Sabah, Deputy Prime Minister and Minister of Foreign Affairs, explains in his foreword to the 2008-2009 Kuwait Fund Annual Report, reflecting upon the previous year of Kuwait Fund programs, "The Fund continued its cooperation with its partners in development, providing them with advice to help them achieve their developmental goals, while maintaining mutual respect and friendly relations with them. This, I believe, would serve our national objectives and promote the role of the State of Kuwait in the international community."

What makes the Kuwait unusual in the Middle East is that unlike other Arab countries which make occasional humanitarian aid donations in response to natural disasters—such as Haiti’s recent earthquake or the consequences of war on civilians and the support of refugee populations—the Kuwait Fund has worked in a systematic way to advance development rather than on an ad hoc basis in response to sudden catastrophes. This makes it exemplary, a possible model for Arab countries with similar economic resources who have not created such government agencies devoted to development aid but who distribute funds for humanitarian relief periodically.

The diversity of peoples and issues receiving development aid from the Kuwait Fund is extensive: from expansion of electricity in the Afar region of Ethiopia to developing the agricultural sector in Lebanon and the poultry sector in Egypt, to irrigation projects in Vietnam, Honduras, Mali, and Nepal and environmental conservation in Ghana.

It has funded projects to expand clean drinking water in Istanbul and rebuild infrastructure destroyed by the earthquake of 1990 and subsequent earthquakes in Turkey and to improve the sewage system and consequently overall public health in Cairo. In the field of public health it has also contributed to programs working to counter the diseases of river-blindness and guinea worm which have had devastating impacts in Sub-Saharan Africa.

The Kuwait Fund represents a model which other Gulf States can draw upon as they expand their development programs and integrate them within broader national foreign policies and priorities. Its record as a pioneer in the Arab world should be acknowledged and celebrated. The Kuwait Fund does have a younger counterpart, the Abu Dhabi Fund for Development, which was established in 1971 and has disbursed over 5 billion dollars in grants and loans, like the Kuwait Fund, mostly for infrastructure development.

While the Kuwait Fund has its own challenges to address, particularly its overemphasis on loans rather than grants, its lack of support for grassroots community development and outreach to the most vulnerable sectors such as women and children, and its preference for large-scale infrastructure projects rather than projects which are often of greater immediate need such as healthcare provision and basic education programming, in many areas it has prioritized human welfare appropriately and achieved significant successes.

In particular, its focus on provision of clean drinking water and improved sanitation through the construction of wells, reservoirs, and related infrastructure in countries like Mali and its irrigation projects in countries like Nepal to improve agricultural output and food security shows a commendable focus on transformative development aid; aid that has far-reaching positive impacts on impoverished populations, and an appropriate emphasis on supporting countries that are among the poorest in the world with low human development. More than one hundred countries have benefited from the Kuwait Fund’s loans and grants – no small achievement.

In the future, should the Kuwait Fund continue and expand upon these efforts and address some of the aforementioned concerns it will build upon an already strong and exceptional record that invites emulation. Countries like Saudi Arabia, Qatar, Bahrain, Oman, and the emirates of the UAE besides Abu Dhabi can learn from the Kuwait Fund and make their own large scale investments in development aid. Should they do so, the potential of Arab countries to promote human development within the Middle East and globally will grow substantially, bringing tangible benefit, hope, and opportunity to hundreds of millions of disadvantaged individuals.

Noam Schimmel - London-based researcher and human rights practitioner with extensive development experience in the field.