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Makkah Newspaper
a day ago
- Business
- Makkah Newspaper
Gulf investments: A sovereign right impervious to critices
Do critics have the right to question the Gulf states' investments in thriving global economies? What truly drives these criticisms? The complex interplay of economic and political dynamics reveals a clear truth: such critiques often lack objective grounding, rooted instead in dubious political or ideological motives, tinged with envy and resentment toward the Gulf's remarkable achievements. Statistics and historical data confirm that, since their founding, Gulf states have pursued a balanced strategy for managing their wealth. They blend domestic development, generous foreign aid, and strategic investments in stable, advanced economies. This thoughtful approach has proven successful over decades, enabling Gulf states to preserve and grow their wealth for future generations while setting a global standard for generosity and support for those in need. An unbiased observer can see that critics who brand Gulf investments in robust global economies as 'plunder' or 'waste' often hail from corrupt authoritarian regimes, terror groups, or factions pushing extremist ideologies hostile to prosperity and stability. These detractors deliberately ignore the Gulf states' sovereign right to manage their wealth and investments in line with their national interests. History clearly documents the Gulf's generosity, with hundreds of billions of dollars in aid extended to Arab, Islamic, and developing countries over decades. For example, Saudi Arabia's aid from 1975 to 2024 totaledapproximately 498.54 billion riyals (132.94 billion USD). From 1976 to 1987, its international development aid reached 49 billion USD, second only to the United States. The United Arab Emirates, meanwhile, has consistently surpassed the United Nations' goal of allocating 0.7% of gross national income to official development assistance, reaching 1.17% in 2014. In several years, the UAE exceeded this target, earning acclaim in reports from the OECD's Development Assistance Committee as the top donor relative to its economy's size. The UAE's deep commitment to humanitarian and developmental responsibilities has been driven by a vision that sees fostering progress in developing countries as a foundation for global stability, not just a diplomatic gesture. When viewed with clarity and fairness, it is evident that Gulf states have never leveraged their aid to exert political pressure or meddle in the affairs of recipient countries. Their assistance springs from genuine humanitarian, moral, and religious values, setting it apart from the often conditional aid of some major powers, which is typically tied to political or economic agendas. The Gulf's decision to channel financial surpluses into strong global economies, notably the United States, is not impulsive but a carefully crafted strategy grounded in a deep understanding of global markets and the need for secure, profitable investments. The U.S. economy, accounting for over 40% of global investments, is a natural choice for countries with surplus funds aiming to maximize returns while minimizing risks. Its vast scale, relative stability, and diverse sectors offer a safe and dynamic investment, unlike the volatility of emerging or unstable markets. Gulf investments in the U.S. serve not only economic purposes but also strategic ones, safeguarding political and security interests. Given their geopolitical position and oil wealth, Gulf states face complex security and political challenges, requiring powerful allies to provide protection and support against regional threats. Investments in economies like the U.S. strengthen strategic partnerships, creating shared interests that bolster regional stability and security. Advanced economies attract Gulf investments due to their political and economic stability, robust legal frameworks, diverse opportunities, technological innovation, and ease of market entry and exit. Calling Gulf investments in thriving global economies 'plunder' is a misguided and misleading label, betraying a lack of understanding of global economic dynamics and international investment principles. Investment is a mutually beneficial exchange, not exploitation. Gulf states gain financial returns and strategic benefits, while host economies benefit from capital inflows that fund projects, create jobs, and fuel economic growth. Since their inception, Gulf states have embraced a governance model built on wisdom, transparency, and long-term planning. Recognizing the finite nature of oil wealth, they understood early on that over-reliance on it threatens future generations. Their strategy hinges on three pillars: domestic development, foreign aid, and global market investments. Openness and coexistence define Gulf societies, setting them apart from those under authoritarian regimes or extremist influence. These states have fostered inclusive, tolerant communities where diverse cultures, religions, and ethnicities thrive in mutual respect and cooperation. Millions of expatriates from around the world live and work in the Gulf with freedom and dignity, practicing their religious and cultural traditions without restriction or harassment. To be sure, Gulf investments in strong global economies come from a place of prudent wealth management and a forward-thinking vision to ensure a prosperous, sustainable future for generations to come. Critics who challenge these investments lack credible evidence or rigorous economic analysis, driven instead by questionable political and ideological motives, revealing envy and resentment toward the Gulf region's success in wisely stewarding its wealth and investments.
The Independent
16-04-2025
- Business
- The Independent
International aid fell in 2024 for first time in five years – and is expected to get worse
Spending on international aid by wealthy countries fell in 2024 for the first time in five years, data shows. Funding from the Development Assistance Committee – a group of 24 territories that includes the US, UK, Australia, and EU member-states – fell by 7.1 per cent year-on-year, down $15.7bn, preliminary 2024 data published by the OECD on Wednesday shows. This trend is expected to increase significantly as the US cuts huge swathes of its aid spending and other countries, including the UK, redirect aid money into other areas including defence. The fall in 2024 was attributed to a fall in contributions to international organisations, as well as a decrease in aid for Ukraine, lower levels of humanitarian aid, and reduced spending on hosting refugees in donor countries. Aid to Ukraine fell by 16.7 per cent year-on-year to $15.5bn, representing around 7.4 per cent of the overseas development aid total, while aid spending on housing refugees in donor countries also fell 17.3 per cent year-on-year to $27.8bn. All monetary values are represented as constant 2023 dollars. Bilateral aid flows to African nations fell by 1 per cent year-on-year to $42bn, while flows to Sub-Saharan African countries fell 2 per cent to $36bn. Bilateral aid flows to the world's least developed countries also fell by 3 per cent, the data shows. 'It is clear that the donor countries are facing significant fiscal pressures from competing spending priorities,' OECD Secretary-General Mathias Cormann said at a press conference on Wednesday, in which he cited health, defence, and domestic investment among other spending priorities for rich countries. 'It will be essential to both boost the effectiveness of existing official development assistance, but also to scale up alternative sources of funding,' he added. Mr Cormann warned that pressures on developing countries were only increasing even as rich countries reduced their foreign aid support, with more than half of developing countries currently allocating at least 8 per cent of their government revenues on interest payments for national debt. Significant increases in aid provided in recent years ensured that aid in 2024 remained 23 per cent higher than the total recorded in 2019. But with countries including the US and UK announcing major aid cuts, the decline witnessed in 2024 is expected to continue, the OECD warned. The OECD currently predicts that aid flows will decline by between 9 and 17 per cent in 2025, based on a recent survey of Development Assistance Committee members. Carsten Staur, chair of the OECD Development Assistance Committee, described the fall in aid after five years of continuous growth as 'regrettable' on Wednesday. 'It's even more concerning that some of the major donors have signalled further, and quite significant, decreases over the coming years,' he added. Mr Staur warned that the needs of low-income countries are only increasing, while the threat of climate change 'will not go away just because Europe faces new military threats'. Some 700 million people continue to live in extreme poverty globally, two-thirds of whom are in Sub-Saharan Africa. Meanwhile, in the world's 26 lowest income countries, aid represents 60 per cent of overall foreign investment. 'So if we see bilateral aid to Sub-Saharan Africa fall, even if only 2 per cent in real terms, this really matters, and especially so if the trend will continue in the coming years,' Mr Staur said. Overall, the US continued to be the largest provider of aid in 2024, contributing some $63.3bn, or 30 per cent of the total from the Development Assistance Committee group of countries. Next on the list is Germany (with $32.4bn provided), the UK ($18bn), Japan (16.8bn), and France (15.4bn). Combined, these five donors made up 69 per cent of all aid provided by Development Assistance Committee countries.
