“Money will not be given for free.” Why has Saudi Arabia changed its way of providing aid?

In a remarkable move, the Kingdom of Saudi Arabia announced on Wednesday that it is changing the way it provides aid to its allies around the world, requiring it to carry out “reforms” instead of “direct grants and deposits without conditions to provide.”

The announcement of this move was made by the Saudi Minister of Finance, Mohammed Al-Jadaan, who said during his participation in the Davos World Economic Forum that the Kingdom is changing the way it provides aid to its allies and countries in the region encouraged to do so. economic reforms.

And the Saudi minister added: “We used to provide grants and direct aid without conditions, and we are changing that. We are working with multilateral institutions to really say that we need to see reforms.”

Al-Jadaan indicated that “we tax our people and we expect others to do the same and make an effort. We want to help, but we want you to play your part.”

Over the past few years, Saudi Arabia and other Gulf states such as the UAE and Qatar have increasingly moved towards investment rather than providing direct financial aid.

Analysts stressed that the Saudi move is very important and has come at a time when the world economy is suffering from several crises.

Fahd bin Juma, an economic analyst and former member of the Economy and Energy Committee of the Saudi Shura Council, says the step is necessary because the money “in many cases did not reach the parties that needed it”.

Bin Jumaa added, in an interview with Al-Hurra, that “the aid should go to the benefit of the people and government services, and nothing else.”

Bin Jumaa believes that “the step is very important and proves that there is a change in the Kingdom’s policy and in how money is directed to serve the citizens of the beneficiary country and not to reach specific people.”

Among the reforms that must be available before money is sent, Ben Jomaa says that it must “take into account the need of the beneficiary country and whether it suffers, for example, from a lack of infrastructure or a lack of social support.”

Bin Jomaa also believes that “there are countries that are poor or need humanitarian aid or in the field of infrastructure, education and health, and this money should go to support and strengthen them or establish new centers, instead of money to a head of state while he disposes of it according to his whims.”

For his part, Saudi academic and economist Mohammed bin Dulaim Al-Qahtani says: “The step has come at a very important time, as the world is witnessing an inflationary stagnation and the world economy is living in a state of uncertainty.”

Al-Qahtani adds to the “Al-Hurra” website that, as a result, “money will not be given freely as in the past, because it harms the economy.”

Al-Qahtani explains that “what we are experiencing today are accumulations of random distribution of these funds, especially by rich countries that have liquidity,” referring to developed countries, including Saudi Arabia, which today adopt what is known as the of strategic spending.

Al-Qahtani explains the nature of the reforms that Riyadh will require before the money is granted, including that the country “has a rational government and wise active leaders who are far from corruption and take into account the global economy”.

The figures published on the Saudi government’s “Aid Platform” website show that the Kingdom has provided more than $64 billion in aid to some 167 countries around the world, most of which was in the form of development aid.

Egypt was first in total aid amounts, with around 13.7 billion dollars, followed by Yemen with around 10 billion, and Pakistan with 7 billion.

And official Saudi media reported earlier this month that the kingdom may increase its cash investments in Pakistan to $10 billion, in addition to raising the ceiling on deposits in the Central Bank of Pakistan to $5 billion.

In June, Saudi Arabia signed deals worth $7.7 billion with Egypt, including the construction of a $1.5 billion power plant, and said it planned to lead $30 billion in investments to help an old ally which faces a weak local currency and foreign exchange shortages.

The kingdom has also established companies in Egypt, Jordan, Bahrain, Sudan, Iraq and Oman, seeking investments of $24 billion there.

Al-Qahtani claims that “the Kingdom, in light of Vision 2030, has come to see the world from a strategic perspective that benefits its economy first, and then the global economy.”

And he shows that “the countries are trying to restore, during the Davos conference, the basic principles of globalization, but in a new way, and we have entered a new phase of strategic globalization codified in spending, initiatives, aid distribution and adjustment the compass to lift the poor countries.”

Al-Qahtani also says, “The Saudi leadership is keen on the country’s money and the quality of work, and that there is strategic spending. We have no problem giving money and support, but there must be a draft mechanism for spending and an administration that monitors this spending.”

He continues, “We are a country that gives to another country, not a country that gives money to people. In the past, people were the ones who controlled this money, so it goes here and there. But today the money will go to development projects and sustainable projects.”

For his part, Bin Jumaa does not believe that the volume of Saudi participation and aid will be affected by a decrease after this step, but he indicated that the Kingdom “certainly will request the availability of conditions before sending money.”

“This does not mean a reduction in Saudi support, but rather a directive in the right direction… and simply the country that does not comply will not receive support,” concludes Ben Jomaa.

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