Saudi gives $3.7bn in aid to region
Riyadh, September 19, 2012
Saudi Arabia has so far disbursed about a fifth of the much-needed aid it promised to Arab countries since uprisings erupted in the region last year, according to the IMF, which cited data from Riyadh's finance ministry.
Riyadh pledged a total of $17.9 billion in loans, grants and other support between the start of 2011 and June 1 this year, to be disbursed over several years, potentially making it a key donor as Arab countries struggle to repair economic damage caused by the uprisings.
It disbursed $3.7 billion of that amount during the period, the International Monetary Fund said in a report on the Saudi Arabian economy, released this week after regular consultations with the Saudi government.
"Regional support has come both in the form of substantial new pledges of financial assistance and indirectly, as fiscal expansion in Saudi Arabia creates increased demand for imports and also raises remittances from foreign labour employed in the Kingdom," the IMF said.
Political and economic uncertainties have slowed transfers of aid by Saudi Arabia and other Gulf countries since the uprisings, analysts have said. The donors want to prevent economic collapses in Arab countries but are wary of giving large sums quickly to new governments which might turn out to be unfriendly or waste the funds.
Egypt has received $1.5 billion of the $4.0 billion it was promised by Saudi Arabia, while Jordan has received $1.4 billion of $2.7 billion, according to the IMF data.
The IMF figures may not include some aid disbursed after June 1. Saudi Arabia has given $350 million of $3.6 billion that it pledged to Yemen, the data shows; but Yemeni officials said this month that Riyadh had provided their country with over $2.2 billion of oil and fuel products this year plus a $1 billion loan to Yemen's central bank.
Morocco and Tunisia are still waiting for the $1.25 billion and $750 million respectively which they were promised, according to the IMF data.
Early last year Bahrain and Oman were promised a total of $5 billion by Saudi Arabia, part of a $20 billion pledge by wealthy Gulf states to help the two countries ease social tensions. The money has not yet started to flow; Bahrain said in June that the aid fund had not yet been capitalised, though it still expected to receive an initial allocation soon.
The $17.9 billion total for Saudi aid pledges is equivalent to nearly 10 percent of the country's 690 billion riyal ($184 billion) state budget for 2012, according to a Reuters calculation. Riyadh has also promised $15 billion of additional resources to the IMF.
The world's largest oil exporter is running a large budget surplus, which is expected to be about 13 percent of gross domestic product this year, according to a Reuters poll of economists in July. - Reuters