Saudi Arabia’s no-strings foreign aid policy days are over
The Kingdom is changing the way it provides assistance and does not grant aid to its allies without strings attached, as Saudi Finance Minister Mohammed Al-Jadaan recently said. Yet, the Kingdom continues to provide direct support to countries in the region, namely Pakistan, Turkiye and Egypt, through joint investments, in a way that benefits all parties, and alternatively channels the funding through a third party, the International Monetary Fund.
This is because the IMF requires important reform criteria for compliance and rights preservation. The most important are transparency, disclosure of profits by stateowned companies, and imposing taxes on government and private companies without exceptions — in a way that promotes the values of competitiveness and impartiality in financial markets. And that activates the role of the State in overseeing and passing investmentenhancing laws and preventing monopolies. Saudi Arabia has supported Egypt with a total of $14 billion and has stopped providing unconditional assistance to all countries since 2018, in line with Vision 2030’s strategic spending policy. Although the US, which ranked second in supporting Egypt, annually supports Egypt with over $1 billion, most of the money is in the form of American military equipment and not as investments, deposits or loans except in the narrowest limits.
Perhaps what is interesting is the UK’s involvement in the investment market in Egypt, and its absence from the list of influential aid providers compared to Saudi Arabia. Its investments are in a set of shares in four companies listed on the Egyptian stock exchange — with a value of barely $1 billion out of the $5 billion allocated for investment and a deposit of the same amount that has been extended, and has to be refunded.
The figures cited above for the Kingdom does not include Saudi humanitarian aid, which has been estimated — since the King Salman Humanitarian Aid and Relief Center’s inception in 2015 — at about $95 billion, to assist 160 countries that operate on completely different paths and priorities and have their own electronic media platforms.
The 2022 Global Humanitarian Assistance
Report indicates that there are 300 million people worldwide in need of urgent assistance, an increase of around 90 million people from
2019, and 50 percent of these people live in nine countries. The shortfall in funding for UN humanitarian projects has reached $33 billion out of $49 billion needed to complete its work, the largest deficit in the history of the UN since its establishment.
What is interesting is that the US, under these difficult circumstances, provided considerable support to Ukraine in its crisis with Russia, and reduced its support to humanitarian and relief organizations such as the UNRWA.
The media outlets of the Muslim Brotherhood in the Kingdom’s neighboring countries and abroad have tried to distort Saudi Arabia’s statements, by attempting to create a crisis between the Gulf states and some other Arab countries.
On the contrary, what is true is that in June 2022 the Kingdom provided Egypt with nearly $8 billion, and helped it build a power plant worth $1.5 billion. Saudi Arabia has also confirmed that it plans to lead $30 billion in investments to help an old ally facing a weak local currency and foreign currency shortages. An Egyptian-Saudi company exists in Egypt having been established through the Kingdom’s Public Investment Fund.
The Kingdom continues to provide direct support to countries in the region, namely Pakistan, Turkiye and Egypt, through joint investments, in a way that benefits all parties.