Saudi Arabia signaled a shift in how it offers financial help to countries, making future aid conditional on promises to revamp their economies.
“We are changing the way we provide assistance and development assistance,” Saudi Finance Minister Mohammed Al-Jadaan said Wednesday at the World Economic Forum in Davos, Switzerland.
“We used to give direct grants and deposits without strings attached and we are changing that,” Al-Jadaan said during a panel discussion that included IMF Managing Director Kristalina Georgieva. “We are working with multilateral institutions to actually say we need to see reforms.”
The Gulf’s leading Sunni power and the biggest oil exporter in the world has long provided a financial backstop for troubled economies in the region with billions of dollars worth of grants and deposits. It’s now flush with a massive windfall from energy revenue last year.
For years, the kingdom was the largest single backer of Egypt and half a decade ago it led a group of other wealthy allies by coming to Bahrain’s rescue. More recently, it’s stepped in to help stabilize countries including Pakistan.
But the new approach is already evident in the way the kingdom dispenses largesse. Egypt is a case in point.
New Tack
Hit hard by the fallout of Russia’s invasion of Ukraine, the Arab world’s most populous nation is in the grip of the worst foreign-currency crunch in years. To help cope, it’s had to request assistance from the International Monetary Fund and allies including Saudi Arabia.
