Study says OPEC funnels more aid to Mideast than to Asian, African states
When oil prices skyrocketed in the 1970s, there were hopes among many poor nations that some of the revenue being earned by Organization of Petroleum Exporting Countries (OPEC) would be redirected to them in the form of aid.
In particular, African countries were encouraged by a 1977 Afro-Arab summit meeting in Cairo to anticipate considerable Arab financial help. Four Arab oil-producing states pledged $1.46 billion in aid for Africa.
But the flow of aid from OPEC to the poor countries has fallen far short of those expectations. This is made clear by a report justUFquoteThe OECD study shows OPEC focusing almost exclusively on its own regional political concerns.
issued by the Organization for Economic Cooperation and Development (OECD).
After rising strongly in the first few years following the boom in oil prices in 1973-74, aid from OPEC to developing nations has fallen away in real terms. The high point was reached in 1978. By 1981, the volume of OPEC aid in real terms was the lowest since 1973. In 1981, OPEC aid amounted to $8.18 billion, or 1.48 percent of gross national product, (compared with the $25.64 billion, or 0. 35 percent of GNP, provided by the 24 members of the OECD).
According to the OECD report, aid as a proportion of the annual income of oil-producing nations in 1981 was about the same as in 1972, just before oil prices began to boom.
Not only has OPEC aid not lived up to expectations, but it has also, on average, been granted on tougher terms than those applied by Western industrialized countries.
In addition, OPEC aid has been limited geographically, both in the countries giving it and in those receiving it. The Arab world dominates in both respects. Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates provided 95 percent of OPEC aid in 1981, with Saudi Arabia providing most of the money. Aid from Iran and Iraq dried up following the Iranian revolution and the war between the two countries. Non-Arab oil countries like Venezuela and Nigeria provide hardly any assistance for their poor neighbors.
Given the Arab preoccupation with the conflict with Israel, it is hardly surprising most of their aid should go to countries in the area bordering on Israel. Jordan, Syria, and, before Camp David, Egypt have been the main beneficiaries. At an Arab summit meeting in 1978, aid amounting to $3.5 billion a year was pledged by Arab nations to Jordan, Syria, the Palestine Liberation Organization, and Palestinians in Gaza and on the West Bank.
This has left little room for the flow of development funds from the Arab OPEC nations to Africa and Asia outside the Middle East. Out of the $1.46 billion pledged to help Africa at the 1977 Afro-Arab summit, only $62 million has been identified as having been put into the African Development Fund or the Arab Bank for Economic Development in Africa.
Overall, the picture given by the OECD shows the Arab OPEC countries focusing their attention almost exclusively on their own regional political concerns. Recycling oil funds cheaply to help development as a whole seems to have had little practical appeal for the rich Gulf states, whatever is said at meetings of nonaligned and developing nations.
Poor non-Middle East countries that have found their trade position sharply worsened by a runaway oil bill can count on little aid. Now that the oil price express has gone into reverse, they can expect even less.
Continuing to finance their own development plans and the ''front-line'' states around Israel should absorb OPEC's funds in the mid-1980s even more than in the past.