Aid and Development Assistance Agencies

Despite the widespread discussions on the recycling of Middle East surplus funds to help those energy-deficient developing countries who suffer considerably as a result of oil price rises, there is little agreement about the most appropriate institutional forms to channel the funds. There are five main mechanisms to effect such transfers, both intra-regionally within the Middle East and extra-regionally to the other Third World importers. Firstly, there are private investment transfers, either through direct investment by wealthy individuals or companies from the oil exporting countries. Secondly, there is the growing volume of remittances from workers who are citizens of energy-deficient developing countries, but who work in the oil-surplus states. Thirdly, there is the recycling which is carried out by the commercial banks through international capital markets, where Third World countries are heavy borrowers, and OPEC capital is deployed, largely through the major western banks, but also increasingly through Middle Eastern-owned banks as discussed in the previous chapter. A fourth method of recycling is through bilateral state transfers, direct from the government of a petroleum exporting country to the treasury or finance ministry of the energy-deficient recipient. Finally there are the transfers through the established Middle Eastern aid agencies, upon which attention will be focused in this chapter, partly because of their increasing significance, but also owing to the interest they appear to arouse.