Since 1961, shortly after the country's independence, a significant contribution from Kuwait's then newly discovered oil wealth was allocated to the Kuwait Fund for Arab Economic Development. The initial capital controlled by the Fund was around $700 million (in current exchange rate terms), but in 1974, this was increased to more than $3.5 billion, and its mandate was expanded to include all developing countries, in addition to Arab countries. Prior to this, the Kuwait Fund's mandate was restricted to financing projects in the Arab world only. In 1981, the Kuwait Fund's capital was doubled to around $7 billion.
It is an extraordinary fact that the Kuwait Fund represents a higher foreign assistance ratio (as a percentage of gross national product) than any other country's official development assistance (ODA) programme.
It is comfortably in excess of the 0.7 per cent target of GNP the United Nations recommends member states provide for overseas development assistance.
And through the Kuwait Fund, the Gulf country contributes to the financial resources of a number of other international development institutions such as the Arab Fund for Economic and Social Development; the African Development Bank Group; the International Fund for Agricultural Development (IFAD); and the International Development Agency (IDA).
Since its inception and up to the end of March 2013, the Kuwait Fund has extended a total of more than 835 loans to 103 beneficiary countries, totalling over $16.5 billion. 240 grants and technical assistance packages have been distributed to 88 countries and institutions, totalling $400 million.
No less than 20 per cent of the monies that the Kuwait Fund distributes is destined for African countries, 40 in total. These concessionary loans, grants and technical assistance packages cover a broad range of sectors beginning with agriculture, transport, communications, energy, industry, water and sanitation. More recently, both health and education programmes have received the Fund's support.
Nevertheless, the transport and energy sectors make up the lion's share of the Kuwait Fund's portfolio.
As previously mentioned, co-financing with other development funds plays an important part in the Kuwait Fund's operations. This arises from the realisation that many large projects in Africa require financing that is too large for a single donor.
Out of the 838 projects that the Kuwait Fund reported financing in March 2013, more than half are co-financed with one or more donor organisations including national, regional and international financing institutions.
Significantly, the Kuwait Fund has supported the Highly Indebted Poor Countries (HIPC) initiative that was rolled out by the IMF and World Bank in 1996. In...