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Saudi Arabia is a leading provider of official development assistance to developing countries, averaging 1.5% of its gross national income (GNI) for the period between 1973 and 2008, according to a study conducted by the World Bank.  Saudi Arabia channels its assistance through the Saudi Fund for Development established specifically for this purpose and is also a generous donor of humanitarian aid, totaling $2.1 billion for the period between 2000 and 2010

I.  Introduction

A.  Official Development Assistance Figures

According to a study conducted by the World Bank, the Kingdom of Saudi Arabia, Kuwait, and the United Arab Emirates have been among the most generous in the world in providing official development assistance (ODA) to developing countries, averaging 1.5% of their gross national income (GNI) during the period from 1973 to 2008.  This rate is about twice as much as the 0.7% target set by the United Nations and about five times the average assistance provided by Organisation for Economic Co-operation and Development (OECD) member states, with Saudi Arabia leading the other two countries, Kuwait and the United Arab Emirates.

Saudi Arabia’s high ODA average of the 1970s and 1980s declined through 2001, but started rising again in 2002 both in terms of the amounts provided and the GNI percentage.[1]

B.  Private Contribution Figures

According to the Saudi Arabia Market Information Resource and Directory (SAMIRAD), the Saudi Government formed official and national committees in each of the cities in the kingdom, under the auspices of a high ministerial committee tasked with coordinating private contributions, to help alleviate the ill effects of the persistent drought in Africa.  The government provided aid in money and in kind payments and called on its citizens to give generously.  Through 1988, the total value of aid provided amounted to 325 million Saudi Riyals.[2]  No relevant information about the status of such private aid has been found for the period after 1988.

C.  Snapshot of Foreign Aid Activity

Between 1975 and the end of 2010, Saudi Arabia financed 472 development projects in 77 countries, in an amount totaling 33,258.99 million Saudi Riyals.  The geographical distribution of these projects is as follows: 43 in Africa, 27 in Asia, and 7 in other parts of the world.[3] 

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II.  Legal Framework

A.  Regulation of ODAs

1.  Overview

Saudi Arabia authorized official development assistance participation by issuing Royal Decree No. M/48 dated August 14, 1394 Hijri (corresponding to September 1, 1974), pursuant to which the Saudi Fund for Development (the Fund) was established.

The Fund’s objective is to participate in financing developmental projects in developing countries through granting loans.[4]

2.  Restrictions

The assistance provided by the Fund is not subject to any specific restrictions except for the following:

  • The project being financed must benefit the country that receives the loan economically or socially;
  • The loan should be disbursed and paid back in Saudi Riyals;
  • The loan amount granted must not exceed 5% of the Fund’s capital or 50% of the total cost of the project; and
  • The aggregate amount of loans granted at the same time to any country must not exceed 10% of the Fund’s capital.[5]

3.  Policy Considerations

The Board of Directors of the Fund is vested with the authority to adopt rules and regulations under which loans are granted and recalled in a manner consistent with Royal Decree No. M/48 of 1974.[6]  However, the Council of Ministers may dispense with any of the conditions prescribed in the Decree provided its decision is based on a recommendation made by the Board of Directors of the Fund and a proposal offered by the Minister of Finance and National Economy as to whether such dispensation is justified.[7]

4.  Discretionary Aid

There are no provisions in the charter of the Fund as established by Royal Decree No. M/48 of 1974 to allow it to give discretionary aid outside the norms described therein.  However, Saudi Arabia is known to have given and continues to give large contributions for humanitarian aid purposes, whether directly or through international or regional organizations.  For example, according to a report citing as a source Development Initiatives, based on data from the Financial Tracking Service of the United Nation’s Office for Coordination of Humanitarian Affairs, Saudi Arabia has given a total of US$2.1 billion in humanitarian aid between 2000 and 2010.[8] 

5.  Oversight

Notwithstanding the role and authority of the general financial inspection department within the Saudi government, the Board of Directors of the Fund may appoint one or more inspectors and financial auditors.[9]

B.  Regulation of Private Contributions

Following the terrorist attacks of September 11, 2001, in the United States, Saudi Arabia is believed to have adopted measures to ensure that contributions by individuals and private organizations are not channeled to terrorist organizations.  However, we were unable to find research sources to identify such measures or the status of the various committees referred to in section I.B, above.

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III.  Foreign Aid Appropriation Process

In addition to the disbursement processes for official development assistance adopted by the Board of Directors of the Fund, Saudi Arabia participates in the following regional and international development institutions, each of which disburses the funds appropriated to it according to its own rules and regulations: Arab Monetary Fund, Arab Fund for Economic and Social Development, Arab Bank for Economic Development in Africa, Arab Investment Guarantee Corporation, Islamic Development Bank, OPEC Fund for International Development, International Bank for Reconstruction and Development, International Monetary Fund, International Development Agency, International Finance Corporation, International Fund for Agricultural Development, Multilateral Investment Guarantee Agency, African Development Bank, African Development Fund, Arab Authority for Agricultural Investment and Development, Islamic Corporation for Investment Insurance and Export Credit, Islamic Corporation for Private Sector Development, International Islamic Trade Financing Corporation, Islamic Solidarity Fund for Development, and the Special Account for financing small and medium size projects in Arab countries.[10] 

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IV.  Implementing Agencies

As explained above, the only agency that implements Saudi policy on providing official development assistance to developing countries is the Saudi Fund for Development. 

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V.  Other Types of ‘Aid’

We were unable to determine whether other types of aid have been regulated in Saudi Arabia.

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Prepared by Issam M. Saliba
Senior Foreign Law Specialist
October 2011

[1] Mustapha Rouis, Arab Development Assistance:  Four Decades of Cooperation, MENA Knowledge and Learning: Quick Notes Series No. 28 (World Bank, Aug. 2010), http://siteresources.worldbank. org/INTMENA/Resources/QuickNote28-ArabODA.pdf.

[2] Saudi Aid at the National Level, SAMIRAD, (last visited Oct. 21, 2011).  At the current exchange rate, one Saudi Riyal equals approximately US$0.266647.

[3] Saudi Fund for Development, Annual Report 2010, documents/document/mdaw/mtqx/~edisp/121-document-141993.pdf (in English; last visited Oct. 21, 2011).

[4] Saudi Royal Decree No. M/48 of 1974 (Royal Decree), art. 1, Bureau of Experts at the Council of Ministers, (in Arabic).

[5] Id. art. 7(a–d).

[6] Id. art. 4.

[7] Id. art. 7, last para.

[8] Kerry Smith, Non-DAC Donors: Arab Donors’ Humanitarian Aid Contributions, Global Humanitarian Assistance, (cut and paste URL into browser; last visited Oct. 21, 2011).

[9] Royal Decree art. 12.

[10] For Saudi contribution amounts and percentages of the total capital of each institution, see Saudi Fund for Development, Annual Report 2010, App. 2, supra note 3.

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Last Updated: 06/09/2015