For over half-a-century, the Kuwait Fund for Arab Economic Development (KFAED) has been spearheading Kuwait’s international development efforts, lending its support to tens of hundreds of projects that have positively impacted the lives of millions in over a 100 countries worldwide.
In a recent exclusive interview with The Times Kuwait, Abdulwahab Al-Bader, Director-General of KFAED spoke at length about the Fund’s activities, its role in promoting the foreign policies of Kuwait and its commitment to maintaining its funding activities in developing countries to the tune of about US$850 million per year for the next five years.
Kuwait has been hailed by the UN as a center for humanitarian assistance, how much of this is due to Kuwait Fund’s activities during the past 54 years?
As you know, His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, the Amir of Kuwait, was named by the United Nations as a Leader of Humanity and Kuwait has been hailed as a center for humanitarian assistance. This recognition by the UN took into account the numerous initiatives launched by His Highness the Amir to assist, in every way possible, countries in their efforts to fight hunger and poverty, to overcome the devastating consequences of natural disasters, victims of war and refugees, and other events impacting negatively on the livelihoods of people.
Kuwait Fund activities over the last 54 years have demonstrated Kuwait’s long-standing solidarity with other developing countries and its commitment to assisting them to achieve their aspirations for sustainable development, through financing projects according to their development priorities, and in accordance with policies and procedures that serve promoting development in partner countries. These efforts by Kuwait Fund extending over 104 countries across the globe evoked wide appreciation by the UN for Kuwait’s humanitarian and developmental efforts and for hailing it as a center for humanitarian assistance.
In our interactions with Ambassadors from around the world stationed in Kuwait, we have heard glowing words of gratitude for Kuwait Fund’s assistance to their countries development. To what extent do the Fund’s activities help in promoting Kuwait’s foreign policies?
Within the framework of its foreign policy principles, Kuwait places emphasis on international cooperation and mutual respect. Deriving from this, Kuwait Fund’s activities are geared to assist developing countries in their efforts to achieve economic and social development. Through its development activities, Kuwait Fund establishes close cooperation with its partners in various regions in the world, including in countries where Kuwait does not have embassies or representation. Consequently, while Kuwait Fund’s development operations serve the interest of recipient countries in development, they at the same time support Kuwait’s foreign policy of establishing strong international relationships and close friendships with other nations.
Since its establishment in 1961, the Fund has disbursed loans and grants totaling about US$ 20 billion. With falling oil revenues and deficit budgets in Kuwait, will the Fund tone down its development assistance in the years ahead?
Kuwait Fund has its own financial resources comprised of its capital and reserves which are not directly linked to Kuwait’s oil revenues. Kuwait Fund will maintain its current level of loan commitments to developing countries at the equivalent of about US$850 million per year over the next five years. This is in addition to technical assistance and grants to be allocated for activities to promote capacity building for implementation of development projects and programs in recipient countries.
Going forward do you see increased instances of parallel or joint financing with other regional and international institutions?
Kuwait Fund continues to welcome and support cooperation with other bilateral, regional and international development institutions and country donors. About 55 percent of projects supported by funding from Kuwait Fund have been co-financed with one financier or more, either on parallel or joint-financing basis.
In case of parallel financing, do you visualize greater collaboration or competition with other organizations?
In fact, parallel financing is often viewed as one way of facilitating co-financing, especially for large size projects and in situations where co-financiers have different procurement procedures for the goods and services required for the implementation of projects. Co-financing, whether parallel or joint, is intended to establish cooperation in order to pave the way for orderly and timely implementation of co-financed projects.
With request for assistance coming in from around the world, how does the Fund select or prioritize which project to lend to?
In approving projects for financing, the Fund is guided by its policies and procedures, which are designed to ensure that the supported projects can contribute effectively to the development objectives of the country concerned. In principle, the Fund respects the priorities of the country requesting financing for a certain project. However, for such a priority project to be approved for financing from the Fund, it should be technically sound and economically viable, and has the potential to contribute to the overall development of the country. In this respect, the Fund carries out its own appraisal of the proposed projects to ensure their justification for financing.
When the Fund decides to support a project, is its role only that of a financial investor, or do you see it as a long-term partnership with the country involved?
The Fund is not a financial investor. It is a development institution with the main objective of assisting other developing countries to achieve their development goals, and thereby improve the livelihoods and standard of living of their peoples. The provision of concessional loans by the Fund is a lending policy aiming at easing the burden of debt service on borrowing countries and to enable them implement infrastructure and social projects that can help them not only in accelerating development, but also can help them in creating better environment for the private sector to be more active in the development process.
Has the Fund transformed some of its loans, especially to least-developed countries, into debt-reliefs over the years?
In 1996, the International Monetary Fund and the World Bank launched an initiative to reduce the debt burden of the Heavily Indebted Poor Countries (HIPC). Kuwait Fund, notwithstanding the concessional aspect of its loans, participated in the aforesaid initiative, and by now has provided debt relief through re-scheduling of its loans to about 30 countries, mostly in Africa.
Since its inception, the Fund has directed much of its aid towards transport, agriculture, water and sewage sectors. Given the growing importance of education and health for sustainable development, will the Fund be looking at these sectors in the future?
Education and health remained outside the scope of Kuwait Fund development operations until 2001, when in that year, the Fund expanded its activities to include education and health in view of their importance in fighting poverty and improving livelihoods. Today, Kuwait Fund places more emphasis on agriculture, education, health, and water and sanitation, in recognition of their role in promoting such goals as food security, eradicating poverty and contributing to sustainable development.
In addition to technical assistance and aid for projects abroad, does the Fund also play a role in developing human resources in Kuwait?
In 2004, the Fund launched a program for training newly graduated Kuwaiti Engineers to help them develop their technical skills and equip them for employment in the private sector. By now, the trainee program, administered by Kuwait Fund and in cooperation with foreign and local engineering firms, has provided training for over 420 engineers, with most of them recruited by the private sector in Kuwait, and thereby assisting in relieving the pressure of unemployment.
At the Third Africa-Arab Summit His Highness the Amir pledged US$1 billion in low-interest loans and the same amount as investment to the African states. What is the role of the Fund in these ventures?
His Highness the Amir of the State of Kuwait directed Kuwait Fund to provide from its resources US$1 billion of concessional loans to African States. The Fund began implementing the initiative two years ago and hopes to complete its commitments over the next three years.
In addition to development aid, you also administer Kuwait’s contributions to the Gaza Strip and other places. In the coming years, do you envision the Fund playing a greater role in the country’s statecraft?
Given the experience of Kuwait Fund in implementation of development projects, Grants provided directly by government are entrusted to be administered by Kuwait Fund, and it will continue to do so as deemed appropriate by the government and the delivery of its grants to recipients.
Can you tell us about the success of some of the projects that have helped societies/countries?
It is difficult to pin down some success stories, but generally speaking, I can say that each project can be a success story based on the objectives to be achieved. A clinic that treat patients, or a school that provides room for more children to be in class, or improving the livelihoods of rural populations through agricultural development, as well as providing electricity or drinking water in remote areas, can all be counted as success stories, so long as they contributed positively to the basic needs of the beneficiaries in various countries and societies.