Kuwait Fund for Arab Economic Development
Encyclopedia
The Kuwait Fund for Arab Economic Development (KFAED), commonly known as the Kuwait Fund, is the State of Kuwait
’s agency for the provision and administration of financial and technical assistance to developing countries. Founded in December, 1961 by then Minister of Finance Sheikh Jaber Al-Ahmad Al-Jaber Al-Sabah
, the Kuwait Fund was operational shortly after the country’s independence, ensuring that Kuwait’s newly discovered oil wealth was put to benefit neighbors and friends alike. The Fund was created as a message from the Kuwaiti people, ensuring that “Here we are embarking on the tides of change but we will not forget our friends in need”.
The Kuwait Fund is the first aid agency in the world to be established by a developing country
. KFAED was originally established with a capital of KWD 50 million, increased to KWD 200 million in 1966.
Kuwait Fund is currently located in al-Murgab, Kuwait City
, in two beautifully-maintained office buildings, for administration and operations, respectively. Managed as a semi-independent arm of the Kuwaiti government, the Fund maintains sovereignty over its operations, notwithstanding governmental oversight. Originally, the Prime Minister of Kuwait
chaired the Fund’s Board of Directors. However, in 2003, an amendment to the law was passed, conferring control of Kuwait Fund to the Minister of Foreign Affairs.
In July 1974, the scope of the Fund’s activity was extended to the rest of the developing world (from its original mandate of solely helping countries in the Arab World
) and its capital increased from KWD 200 million to KWD 1000 million.
In March 1981, Kuwait Fund’s capital was again increased, this time doubled to KWD 2000 million, with its range enlarged to include participation in the capital and resources of development institutions and in the equity capital of certain corporate entities.
The Kuwait Fund remained operational during the 1990 Iraqi Invasion of Kuwait
, and was instrumental in swaying global opinion to Kuwait
's side. While the headquarters were completely ransacked, the Fund regained its operational momentum shortly after the liberation of Kuwait
.
Through the Kuwait Fund, Kuwait maintains a higher foreign assistance ratio (as a percentage of the GNP
) than do other rich capital surplus countries. Kuwait easily achieves and surpasses the target 0.7% of GNP
that the United Nations
specifies for development assistance. The State of Kuwait also maintains its support and contributions to the resources of other international development institutions, such as the Arab Fund for Economic and Social Development
, the African Development Bank
, the International Fund for Agricultural Development
, and the International Development Association
through the Kuwait Fund.
Under a new law, the Kuwait Fund is obligated to transfer up to 25% of its net annual income to the Public Authority for Housing Assistance, as a contribution of its resources.
Since 2004, the Kuwait Fund has launched the semi-annual Training Program for newly-graduated Kuwaiti engineers and architects. Costing about KWD 1 million per year, the program seeks to train about 40 engineers and architects a year, by providing in-house training courses, a six-month apprenticeship in an international company abroad, and a local internship in Kuwait. The purpose of the program, as stated by the current Minister of Foreign Affairs Sheikh Mohammad Al-Sabah Al-Salem Al-Sabah, is to train and prepare Kuwaiti engineers and architects for work in the vastly-expanding Kuwaiti private sector. A similar program is being held for business students at the Kuwait Investment Authority
.
Since its inception, the Kuwait Fund has given a total of 719 loans, to 101 beneficiary countries, totaling KWD 3,857.79 million. 200 Grants & technical assistance packages have been distributed to 88 countries and institutions, totaling KWD 98.54 million.
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
’s agency for the provision and administration of financial and technical assistance to developing countries. Founded in December, 1961 by then Minister of Finance Sheikh Jaber Al-Ahmad Al-Jaber Al-Sabah
Jaber Al-Ahmad Al-Jaber Al-Sabah
Jaber III al-Ahmad al-Jaber al-Sabah, GCB , GCMG of the al-Sabah dynasty, was the Emir and thirteenth Sheikh of Kuwait, serving from December 31, 1977 until his death on January 15, 2006...
, the Kuwait Fund was operational shortly after the country’s independence, ensuring that Kuwait’s newly discovered oil wealth was put to benefit neighbors and friends alike. The Fund was created as a message from the Kuwaiti people, ensuring that “Here we are embarking on the tides of change but we will not forget our friends in need”.
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...
. KFAED was originally established with a capital of KWD 50 million, increased to KWD 200 million in 1966.
"When first established in 1961, the Kuwait Fund was without precedent. Here was KuwaitKuwaitThe State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
, a tiny country, until recently among the poorest places in earth, establishing a development fund in the year of its political independence. While welcoming its new-found prosperity it was declaring a willingness to share its future wealth with its Arab neighbors." *
-Robert McNamaraRobert McNamaraRobert Strange McNamara was an American business executive and the eighth Secretary of Defense, serving under Presidents John F. Kennedy and Lyndon B. Johnson from 1961 to 1968, during which time he played a large role in escalating the United States involvement in the Vietnam War...
, President of the World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
(1968-1981)
Kuwait Fund is currently located in al-Murgab, Kuwait City
Kuwait City
-Suburbs:Although the districts below are not usually recognized as suburbs, the following is a list of a few areas surrounding Kuwait city:Al-Salam ""السلام"" -Economy:...
, in two beautifully-maintained office buildings, for administration and operations, respectively. Managed as a semi-independent arm of the Kuwaiti government, the Fund maintains sovereignty over its operations, notwithstanding governmental oversight. Originally, the Prime Minister of Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
chaired the Fund’s Board of Directors. However, in 2003, an amendment to the law was passed, conferring control of Kuwait Fund to the Minister of Foreign Affairs.
In July 1974, the scope of the Fund’s activity was extended to the rest of the developing world (from its original mandate of solely helping countries in the Arab World
Arab world
The Arab world refers to Arabic-speaking states, territories and populations in North Africa, Western Asia and elsewhere.The standard definition of the Arab world comprises the 22 states and territories of the Arab League stretching from the Atlantic Ocean in the west to the Arabian Sea in the...
) and its capital increased from KWD 200 million to KWD 1000 million.
In March 1981, Kuwait Fund’s capital was again increased, this time doubled to KWD 2000 million, with its range enlarged to include participation in the capital and resources of development institutions and in the equity capital of certain corporate entities.
Invasion of Kuwait
The Invasion of Kuwait, also known as the Iraq-Kuwait War, was a major conflict between the Republic of Iraq and the State of Kuwait, which resulted in the seven-month long Iraqi occupation of Kuwait, which subsequently led to direct military intervention by United States-led forces in the Gulf...
, and was instrumental in swaying global opinion to Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
's side. While the headquarters were completely ransacked, the Fund regained its operational momentum shortly after the liberation of Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
.
Through the Kuwait Fund, Kuwait maintains a higher foreign assistance ratio (as a percentage of the GNP
GNP
Gross National Product is the market value of all products and services produced in one year by labor and property supplied by the residents of a country...
) than do other rich capital surplus countries. Kuwait easily achieves and surpasses the target 0.7% of GNP
GNP
Gross National Product is the market value of all products and services produced in one year by labor and property supplied by the residents of a country...
that the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
specifies for development assistance. The State of Kuwait also maintains its support and contributions to the resources of other international development institutions, such as the Arab Fund for Economic and Social Development
Arab Fund for Economic and Social Development
The Arab Fund for Economic and Social Development is a Kuwait-based, pan-Arab development finance institution. All member-states of the Arab League are members of the AFESD. As of 2003, it held around USD 7.3 billion in assets....
, the African Development Bank
African Development Bank
The African Development Bank Group is a development bank established in 1964 with the intention of promoting economic and social development in Africa...
, the International Fund for Agricultural Development
International Fund for Agricultural Development
The International Fund for Agricultural Development , a specialized agency of the United Nations, was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference. IFAD is dedicated to eradicating rural poverty in developing countries...
, and the International Development Association
International Development Association
The International Development Association , is the part of the World Bank that helps the world’s poorest countries. It complements the World Bank's other lending arm — the International Bank for Reconstruction and Development — which serves middle-income countries with capital investment and...
through the Kuwait Fund.
Under a new law, the Kuwait Fund is obligated to transfer up to 25% of its net annual income to the Public Authority for Housing Assistance, as a contribution of its resources.
Since 2004, the Kuwait Fund has launched the semi-annual Training Program for newly-graduated Kuwaiti engineers and architects. Costing about KWD 1 million per year, the program seeks to train about 40 engineers and architects a year, by providing in-house training courses, a six-month apprenticeship in an international company abroad, and a local internship in Kuwait. The purpose of the program, as stated by the current Minister of Foreign Affairs Sheikh Mohammad Al-Sabah Al-Salem Al-Sabah, is to train and prepare Kuwaiti engineers and architects for work in the vastly-expanding Kuwaiti private sector. A similar program is being held for business students at the Kuwait Investment Authority
Kuwait Investment Authority
The Kuwait Investment Authority is Kuwait's sovereign wealth fund , managing body, specializing in local and foreign investment...
.
Since its inception, the Kuwait Fund has given a total of 719 loans, to 101 beneficiary countries, totaling KWD 3,857.79 million. 200 Grants & technical assistance packages have been distributed to 88 countries and institutions, totaling KWD 98.54 million.