Abstract
Despite the widespread discussions on the recycling of Middle East surplus funds to help those energy-deficient developing countries who suffer considerably as a result of oil price rises, there is little agreement about the most appropriate institutional forms to channel the funds. There are five main mechanisms to effect such transfers, both intra-regionally within the Middle East and extra-regionally to the other Third World importers. Firstly, there are private investment transfers, either through direct investment by wealthy individuals or companies from the oil exporting countries. Secondly, there is the growing volume of remittances from workers who are citizens of energy-deficient developing countries, but who work in the oil-surplus states. Thirdly, there is the recycling which is carried out by the commercial banks through international capital markets, where Third World countries are heavy borrowers, and OPEC capital is deployed, largely through the major western banks, but also increasingly through Middle Eastern-owned banks as discussed in the previous chapter. A fourth method of recycling is through bilateral state transfers, direct from the government of a petroleum exporting country to the treasury or finance ministry of the energy-deficient recipient. Finally there are the transfers through the established Middle Eastern aid agencies, upon which attention will be focused in this chapter, partly because of their increasing significance, but also owing to the interest they appear to arouse.
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Notes
Several books have been written on the Kuwait Fund, including Robert Stephens, The Arabs’ New Frontier (London: Temple Smith, 1973)
and Soliman Demir, The Kuwait Fund and the Political Economy of Arab Regional Development (New York: Praeger, 1976).
The earliest account of its activities was in Ragaei El Mallakh, Economic Development and Regional Co-operation: Kuwait (University of Chicago Press, 1968) Chapter 6, pp. 181ff. especially.
A brief account also appears in Rodney Wilson, Trade and Investment in the Middle East (London: Macmillan, 1977) Chapter 5, pp. 101–4.
Rodney Wilson, “Arab Aid Funds: Moving out of the Middle East”, Wall Street Journal, 7 December 1979, p. 15.
Ibrahim Shihata, The Kuwait Fund for Arab Economic Development: A Legal Analysis (Kuwait, 1973) p. 17.
Where countries have a more favourable exchange rate for capital imports, this exchange rate is used, which adds to the bias. For a general discussion of appraisal techniques used by the Arab funds see Traute Scharf (ed.), Trilateral Co-operation (Paris: OECD, 1978) Vol. 1, Arab Development Funds and Banks, pp. 57–64.
For an account of its history and purpose see Soliman Demir, Arab Development Funds in the Middle East (New York: Pergamon Press, 1979) Chapter 3, pp. 40ff.
Dr Mohammed Imadi, a former Minister of Economy. See Kathleen Evans, “Policies — a Model for Other States”, Financial Times Report on Kuwait, 25 February 1981, p. 11.
Rodney Wilson, “Oil Exporters Emerge as Important Source of Aid”, Times Report on Banking in the Middle East, 18 February, 1977, p. 2.
See Shimeon Amir, Israel’s Development Co-operation with Africa, Asia and Latin America (New York: Praeger, 1974).
For an African perspective of what was wanted from the Arab world, see E.C. Chibwe, Arab Dollars for Africa (London: Croom Helm, 1976).
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© 1983 Rodney Wilson
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Wilson, R. (1983). Aid and Development Assistance Agencies. In: Banking and Finance in the Arab Middle East. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-04817-5_7
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DOI: https://doi.org/10.1007/978-1-349-04817-5_7
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