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ProQuest Information and Leaming Company 300 North Zeeb Road P.0. Box 1346 ‘Ann Arbor, Ml 48106-1346Howard University Graduate School Department of African Studies DISSERTATION COMMITTEE Dissertition Chairperson Rater Robert Edgar, Ph.D. Mohammad Siliah, Ph.D. Professor, Political Science Dept. Hampton University Hampton, VA Dissertation Advisor Candidate: Khaled M. Alghoraiyr Date of Defense: August 24, 2001Dedication peal gad all any In the name of Allah, the most Gracious, the most Merciful I dedicate this dissertation to those who work for freedom from poverty and those who value freedom of conscience in Islam. This dissertation seeks to examine the truth as a meaningful goal in the life of those scholars who serve Islam as a beacon of hope for the many who live in poverty and ignorance. I dedicate this dissertation to the many scholars of Islam who guided me through this educational journey to learn the value of interdependence across social, economic, and cultural boundaries. Our support no matter how small, will definitely help alleviate some of the suffering that people face every day. In Islam, if a person alleviates someone's suffering in this life, Allah will do the same for him or her in the hereafter and greatly reward them. As Allah has praised them in The Holy Qur’an saying, dee te anol ip aS all ae aed lel cpg cil he Gere ly all g oly cyl icky ally dw Sts alee IS gd THY ode (the likeness of those who spend their wealth in the way of Allah, is as the likeness of a grain (of com), it grows seven ears, and each ear has a hundred grains. Allah gives manifold increase to whom He wills. And Allah is All-Sufficient for His creatures needs, All- Knower) Surat 2. AlBaqarah V 261 I dedicate this dissertation to the millions of poor people that Saudi Arabia is trying to assist to live in dignity and freedom from poverty, ignorance, and diseases. iiiAcknowledgment All Praises to Allah, the most Gracious and the most Merciful. I thank Allah, my Lord, for His Guidance and Help. Without His Guidance and Help, none of my life’s achievements would have been possible. I also ask Him to forgive my sins, shortcomings, and omissions. I would like to thank my mother Norah and my father Mohammed for their prayers, love, and encouragement, and for their efforts to teach me at an early age to. appreciate the value of learning. Special thanks to my family including my wife, Ebtesam, and my children Nora, Mohamed, Saif, Abdullah, and Abdulrahman for their assistance and patience. I extend my thanks to my family for their support during my long stay in the USA. I thank all the dissertation committee members, Drs. Sulayman Nyang, Wilfred David, Ahmed Moen, and Robert Edgar, for their assistance and constructive critique. T have benefited from my meetings with them during the long process of this dissertation and the exchange of ideas throughout my learning experience. Finally, 1 would like to point out that views, suggestions, and conclusions expressed in this study are in pursuit of academic research and do not reflect my official position as a diplomat representing the government of the Kingdom of Saudi Arabia, ivAbstract Development assistance is one of the most important tools in any country’s foreign policy. Saudi Arabia's multilateral and bilateral development and cultural assistance to sub-Saharan African countries is a faith-based assistance model to be emulated by other Muslim countries. This is the first major study that describes and analyzes the largest economic assistance from developing to less-developed countries. It is, im fact, one of the largest development assistance programs of its kind in the Third World. This study does not focus on development assistance only, but also the historical connection between Saudi Arabia and Africa. Saudi Arabia’s geographical location, surrounded on three sides by water and shielded by a large open desert on the fourth, plays a significant role in formulating its foreign policy. Saudi Arabia and Africa have close relations in terms of people, customs, history, and geography, even though the Red Sea separates the two regions. Saudi Arabia, as the site of the two holiest mosques in Islam, is the epicenter of Islamic devotion and prayer worldwide. It is the heartland of Islam and the birthplace of its message. This study attempts to examine the various factors associated with Saudi development and cultural assistance and its unique impact and outcome rather than any other form of assistance. Its basic assumption is that economic assistance coming from a developing country is more acceptable than that from industrialized countries. Saudi development and cultural assistance employs a mix of geo-politics, security, religion, ethnicity, historical, and humanitarian components which influence its multilateral and bilateral missions. In order to accomplish its mission, Saudidevelopment assistance is a collaboration with the Saudi Fund for Development, the Arab Bank for Development in Africa, and the OPEC Fund. These institutions are engaged in financial assistance to promote and help Africa with grants and loans for infrastructure, health, water supply, energy, agricultural projects, and educational centers. Also, Saudi Arabian cultural assistance helps Africa in building Islamic centers and education by providing scholarship to Africans. It has been accomplished through the Organization of Islamic Conference, the Islamic Development Bank, and the Muslim World League. The findings of this study are that Saudi Arabia has pursued a foreign assistance program that is largely inspired by Isam and the principles of national interest. Data collected for this study have allowed us to reach certain conclusions regarding the relationship between Saudis and Africans. The first conclusion is that Saudi Arabia has over the years given more financial assistance per capita than many of the developed countries. Second, the study suggests that Saudi Arabian development and cultural assistance has made a major impact in minimizing the poverty level among the targeted sub-Saharan African countries. Third, Islam has continued to play an important part in formulating the implementation of Saudi foreign assistance which effectively enhanced the indigenous Islamic education and ‘humanitarian institutions. Fourth, the political and cultural ties between Saudi Arabia and Africa have been enhanced by collaborative capacity building of the public and private development sectors. And, finally, Saudi development assistance effectively contributes to the quality of life of the recipient countries more than military assistance as a tool of foreign policy.Table of Contents Page DISSERTATION COMMITTEE. DEDICATION... iti ACKNOWLEDGMENTS. iv ABSTRACT ssesrseen v LIST OF TABLES... xi LIST OF FIGURES.. xiii CHAPTER I, INTRODUCTION. 1 Statement of the Problem. 12 Purpose of the Study and Research Questions... 13 ‘Hypotheses 14 Limitations of the Study. . — 15 Importance of the Study 7 Assumptions ............ . eee 18 Literanme Review) 19 Methodology. 32 Glossary of Terms... cee 34 Definition of Acronyms : oe ese 39 CHAPTER Il. KINGDOM OF SAUDI ARABIA ~ AN HISTORICAL REVIEW. a Introduction .......nreesne . - . 4 Saudi Arabian Foreign Policy . ee Brief Description of Saudi Arabia........ a «Table of Contents (continued) Page Geography. 46 History 47 Population. : 49 Government and Law . 51 Social Structure of Saudi Arabia ......c0c0 enn nnenene 4 54 36 ly 61 Role of Women in Saudi Arabia... 62 Conclusion. 64 CHAPTER IIL. POVERTY IN SUB-SAHARAN AFRICAN COUNTRIES 66 Introduction .. 66 Definition of Poverty .... eee . 0° Nature of Challenges Facing African Countries....... - n Cause of Underdevelopment (Poverty). ce : 4 Dependency Theory ...... 16 The Vicious Circle of Poverty : 82 Balanced Growth and Determination of Market Size . 84 Foreign Aid to Sub-Saharan African Countries ....... . oo Motives for Supplying Foreign Aic..... 90 The Effectiveness of Supplying Aid... pecnennnnnnnee 94 Debt Crises in Sub-Saharan African Countries . ee Challenges Facing African Countries 100 Weakness of Investment Incentives. 104 viiiTable of Contents (continued) Conclusion. CHAPTER IV. SAUDI DEVELOPMENT ASSISTANCE THROUGH BILATERAL AND MULTILATERAL INSTITUTIONS... Introduction... Saudi Fund for Development .. SFD Projects in Kenya SFD Projects in Mali SFD Projects in Senegal : SFD Projects in Sahel Countries OPEC Fund for International Development. Arab Bank for Economic Development in Africa Saudi Arabian Contributions to Africa for Famine, Drought, and Flood Crises ...... a Conclusion. CHAPTER V. SAUDI CULTURAL ASSISTANCE THROUGH BILATERAL AND MULTILATERAL ISLAMIC INSTITUTIONS. Introduction... Organization of the Islamic Conference Principle Organizations of the OIC. Conference of Kings and Heads of States and Governments... — Islamic Conference of Foreign Ministers. General Secretariat ... 7 International Court of Justice Specialized Committees of the OIC... ‘Committee on Al-Quads (Jerusalem), Standing Committee for Information and Cultural Affair ix Page 10s 108 108 113 121 126 128 131 133 137 4s 147 1st 151 160 167 167 168 168 169 im 172Committee of Islamic Solidarity with the People of the Sahel Countries... Subsidiary Organizations........ Islamic Solidarity Fund... Islamic University in Niger Islamic University in Uganda... .cc-cnencecsseees ‘American Islamic College : Emergence and Development of Islamic Banks...... Rules Regarding Ri Riba 2 (Usury) and Its Different Forms .. | Islamic Development Bank ... Loan Financing . Technical Assistance. Leasing (Wjaral)... IDB Educational and Scholarship Program. IDB Participation in the Sacrificial Meat Utilization Project... -~ Muslim World League Saudi Assistance Delivered Through the MWL Islamic Relief Organization... World Assembly for Muslim Youth - Conclusion....... CHAPTER VI. CONCLUSION. APPENDIX A. LIST OF SAUDI ARABIAN MISSIONS IN SOME AFRICAN COUNTRIES..... BIBLIOGRAPHY .. 172 1B 173 174 174 175 176 178 181 185 186 188 189 190 192 197 200 201 202 207 224 23010. Ml. 12, 13. 14. 15 16. List of Tables Major Dates in Islamic History ... Comparison of Muslim and Christian Calendars Population Living on less than $1 a Day, 1998...... Foreign Aid as a Percentage of GNP, 1987........ Per Capita Aid Receipts, 1988 Saudi Arabian Contributions to Arab Regional and International Development Institutions SFD Geographic Distribution of Disbursements, 1997 SFD Sector Distribution of Disbursements, 1975-1997 Geographical Distribution of SFD Disbursements, 1975-1997 .. SS Developmental Projects Financed/co-Financed by the SFD in Kenya, 1975-1995 ...... Financial Partners in Kembiri Dam Project on the Tana River, Kenya, 1984-1988 ... a Developmental Projects Financed/co-Financed by the SFD in Mali, 1975-1997. Financial Investors in the Salangy Dam on the Sankaran River, Mali Eletiity, gation, and Fishing)... Developmental Projects Financed by the SED in Senegal, 1975-1997 Financial Partners in Senegal River Development Projects, 1997 a SFD Program for Digging Wells and Development in the Sahel Countries, 1984-1991 7 Page 56 66 89 o1 12 116 17 124 126 127 128 129 130 13117. 18. 19. 20, 21 22, 23. 24. 2s. List of Tables (continued) Page Distribution of BADEA Loans, 1993...... 7 eects 140 Geographical and Sector Distribution of BADEA Loans, 1993... 141 Financial Partners of BADEA, 1975-1993 cecceeesseneen 142 Funding and Shares of Member Countries of BADEA, 1993 144 Membership of the Organization of the Islamic Conference, 1997 164 Subscription Shares to IDB Share Capital, 1997. 182 IDB Loan Projects Approved, 1997 .......ccnnrnnnnnerenenensne 187 Technical Assistance Operations Approved by the IDB, 1997 . 188 Sacrificial Meat Distribution Program, 1991-1997... 191 xiiList of Figures Page Council of Ministries and Public Corporations. nn) The Vicious Circle of Poverty... losin 84 Supply Side... 85 Demand Side 85 Estimated American Support of Israel 90 Distribution of SFD Funds on the African Continent, 1975-1997 eee 14 SFD Cumulative Disbursements, 1975-1997... 118 Distribution of OPEC Fund (through December a . : oe ve w. US Some OIC Recipients of Aid from Saudi Arabia, 199) . . 170 xiiiCHAPTER 1. INTRODUCTION “Allaiu Akbar\” (God is the Greatest!) The call that proclaimed Islam and a voice that was heard fourteen hundred years ago, coming from the cradle of Islam in Makkah and Madinah. Islam had arrived in Arabia, and its call soon echoed across the Red Sea and into Africa, westward, then sweeping north into Persia, Iraq, and to the ast into India and then China. It eventually established itself in Turkey, the Balkans, Spain, in Europe and Asia Minor. In the process of assimilation of Islam, the Arabian culture influenced much of the world for over 1,000 years. Arabic became the first or second language of many countries. From all corners of the world, people greet each other with “as-salaamu alaykum” (Peace be with you). Islam not only influenced history in cultural changes, but alSo the fields of science and education were very positively affected by its advent. Arabic numerals continue to be used around the world today, and there were many other discoveries. Islam is understood to be more than just a religion. It is a complete way of life for those who choose to believe in it. Islam expounds human and physical knowledge and brought an understanding of sciences, such as chemistry, algebra (Arabic: al-jibr), medicine, astronomy, as well as poetry, art, architecture, philosophy—all of these are the thought of the religion whose origin is in the arid desert of Arabia. Once again, the peninsula of Arabia has produced a nation of great importance and status with significant force in international political affairs, The Kingdom of Saudi Arabia has emerged over the last few decades to become a major player in the world’s economic and political policies. This is nowhere more pronounced than in its impact on the Muslim countries of Africa. The religion of Islam still plays a key rolein the cultures of Muslim governments, in general, but more, in the decision-making policies of the Saudi Arabian government, especially with regard to their economic and foreign policies. Presentations and discussions of facts that deal with particular and unique concepts, understandings and perceptions, economic speculation, and investment in space, medicine, or computer sciences require terms that must be restated and reiterated throughout a documentation to give the reader a comprehensive grasp of the ‘material under consideration. For this reason, it will be necessary to revisit the subject of Islam throughout this work as it applies to various concepts, understandings, approaches to problems; and the influence that Islam has on the mindset of the Saudi Arabian government and Muslims regarding decisions on policies and diplomatic approaches to global outreach. Presented now is a cursory introduction to Islam as it is understood by those who adhere to the Islamic faith. According to Islamic faith and law, Islam places great emphasis on the necessity of obedience to God’s law in addition to faith. The Qur'an is the fundamental and ultimate source of knowledge about Allah (God). This book (The Holy Qur'an) contains both the theology of Islam and the patterns of ethical and appropriate conduct to which a Muslim ‘must subscribe. Included in the Qur'an are some basic concepts that the Islamic community holds in common as fundamental to their faith. [/slamic Faith & Law, 251 “Civilization: Past & Present"). The role of Islam, as it affects the minds and hearts of the Muslims and particularly the Arab mentality, must also be taken into consideration for a better understanding of the role Saudi Arabia plays in today’s political and global economies.‘Saudi Arabian development and cultural policies play the role of both defender of the faith of Islam and role model for Muslim cooperation worldwide. Saudi Arabia's international policies toward and relationships with Muslim countries have gained world attention due to its huge reserves and export of oil. Additionally, it is the central focal point for all Muslims around the world due to the location of the two holiest mosques being situated in Makkah and Madinah, Saudi Arabia. Makkah is the epicenter and the direction toward which all Muslims must face for their prayers five times each day. Madinah is the burial place of the last prophet of the Abrahamic “triumvirate” of monotheism, Prophet Muhammad {Peace Be Upon Him}. Arabia is the birthplace and the heartland of Islam for over one and one-half billion Muslims around the world. Thus, we can better understand the key role Saudi Arabia plays in the international realm of politics polices around the world, especially for Third World Muslim countries. Saudi Arabia must be viewed as one of the world’s most strategic ‘countries and the key state in international assistance and development. Many scholars have looked at Saudi foreign policy from the perspective of its history, location, oil, Islam, and the monarchy. Saleem Khan (1974:79-90) suggested that the last three policy areas, namely Islam, oil, and the monarchy, are the most important. The geographic location of Saudi Arabia plays a significant role in its foreign policy strategy as well. Surrounded on three sides by water and shielded by a large open desert on the fourth side, the Kingdom looks like an island. ‘The northern and southern boundaries of the Arabian Peninsula also represent a strategic bulwark for the Kingdom since these physically have made it difficult for the advancement ofhostile forces against the center of the Kingdom. This may explain why the hinterland of the Kingdom has never been extensively occupied by a military or colonial power. Islam is the religion of the country and the way of life in Saudi Arabian culture. Islam has profoundly affected the history and development of the Arabian Peninsula and of the Kingdom of Saudi Arabia. The Holy Qur'an is literally the constitution of the Kingdom and the Shari‘ah (Islamic law) is the basis of the Saudi legal system. The discovery of oil seems to have had little impact on constitutional underpinnings of the governing system. Oil was first discovered in Saudi Arabia in the 1930s, and this has had a great impact on the economy of the country, Since the early 1960s, Saudi Arabia has played a major role in the founding of the Organization of Petroleum Exporting Countries (OPEC), its leadership is critical to the global economy. The monarchy of Saudi Arabia was established over 70 years ago under King Abdul-Aziz Al-Sa'ud. But the person who masterminded the Saudi Arabian contemporary foreign policy was his successor and son, King Faisal, according to ‘Sulayman Nyang (1982:6), an expert in Middle East politics. Upon his ascent to the throne in 1965, King Faisal became the strongman of the Saudi system, and during this period, many great and notable changes took place in regard to the development of industry and commerce throughout the country. Cultural and development assistance to other countries is the most important non-military tool of Saudi Arabian foreign policy. A mix of geopolitical, security, religious, ethnic, historical, and humanitarian factors motivates Saudi Arabian bilateral aid programs. In some cases, Saudi Arabia's foreign aid serves as an adjunct to itsmilitary strategy. The Saudis view foreign aid to Muslim countries as one of the significant factors fostering regional political stability as well as protection of the cause of Islam. In other cases, Saudi foreign aid programs enhance the Kingdom's international standing, prestige, and influence in international economic organizations. Saudi Arabia plays a major role in supporting development in the less- developed countries (LDCs) in general and in sub-Saharan African countries (SSACs) in particular. Saudi development assistance amounts to 7% of its gross national product (GNP), which is about 100 times the amount recommended by the United Nations for foreign aid-0.07% of each country’s GNP (Ministry of Finance & National Economy 1991:15). Saudi Arabia and Africa are very closely related in terms of people, relationships, and geographic location, with the Red Sea as the only boundary that separates the two regions. Throughout history, Arabs from the Arabian Peninsula, especially those who live in Hijaz Province in Western Saudi Arabia, have traveled to Africa along the east coast of Africa. Moreover, the first migration to Ethiopia fourteen centuries ago also initiated and solidified the Islamic connection to Africa. The relationship between Arabs in general, and Saudis in particular, with Africans is unique and began thousands of years ago. Throughout the centuries, the Arabs considered Africa a continent, not a series of countries, as it is today. It was only during European colonialism that European drew the boundary lines that now divide up Africa. At present, there are six Arab countries located in Africa—Egypt, Libya, Algeria, Morocco, Tunisia, and Sudan. In addition, there are a number of African countries that are members of the Arab League, headquartered in Cairo, Egypt,including Somalia, Mauritania, and Djibouti. Nine members of the Arab League are located on the African continent; they are also members of the Organization of African Unity (OAU). The Arab League per se contributes one-third of the entire budget of the OAU, despite the fact that only about one-fifth (9 out of 48) of the OAU’s members are identifiable as Arab (Israeli 1979:39). Also, many African countries, such as Gambia, Niger, Guinea Bissau, Mali, and Nigeria are full members of the Organization of Islamic Countries (OIC). Thus, Saudi Arabia and many African countries share similar objectives and have a commonality in their policies, since both sides share strategic political, cultural, and economic policies. For the past 50 years, scholars have been discussing, arguing, studying, and trying to understand the complexity of development and underdevelopment with the aim of reducing poverty in the world. In the 1950s and 1960s, many viewed large investments in capital and physical and infrastructure as the primary means of development. In the 1970s, awareness grew that health and education were more important than physical capital. The World Development Report 2000/2001 of The World Bank argued that improvements in health and education were important not only to the poor in their own right, but also to promote growth in income for poor people. The 1980s saw another shift of emphasis following the debt crises and global recession. Emphasis was placed on improving economic management and allowing a greater play for market forces. Debt crises, foreign aid, and global recession have had a deep impact on sub-Saharan African countries economically, politically, and socially. The World Development Report 1990 of The World Bank on poverty proposed two strategies: to promote labor-intensive growth through economicopenness and to make investments in the infrastructure and provide basic services to Poor people in health and education. Development in the year 2000 has moved governance institutions toward center stage, promoting opportunity, facilitating empowerment, and enhancing security. It has moved to enhance political stability and to create conditions for peace so development can be accomplished (The World Bank Report, Attacking Poverty 2000/2001). Saudi Arabian foreign aid is different from that of Western institutions such as The World Bank because it is coming from a Third World country and it has gone directly toward helping the poor in fighting poverty with grants and interest-free loans. The population of African countries south of the Sahara is large; however, some SSACs without large populations are also politically unstable. Political stability and peace are the core of development. Saudi Arabia has both peace and resources and feels its responsibility toward Islamic brotherhood, a commitment to all Muslims around the world, especially for those Africans living south of the Sahara. Saudi Arabia is very active when it comes to participating in efforts to help and improve the social and economic conditions of African countries to achieve prosperity. The Saudi Fund for Development (SFD) has helped several SSACs in many of the social sector projects including infrastructure, education, health, water supply, energy, and agricultural benefits. SSACs received 63% of Saudi Arabia's foreign assistance, out of 37% allocated for North Africa geographic distribution between 1975-1991 (Saudi Fund for Development 1992:12-3). Saudi Arabia is also a major contributor to Arab regional and international development institutions. Saudi Arabia has a strong economi influence over several Arab countries because it is a bigcontributor to regional developmental banks. As a consequence, Saudi Arabia exercises its voting power over several of the countries in these banks. ‘Saudi Arabia has made some progress in influencing African political support since the initiation of its foreign aid programs. Evidence of this can be measured in terms of the increased number of Aftican embassies in Saudi Arabia and of Saudi missions in Aftica. Saudi foreign aid to these countries has contributed to Islamic solidarity. Influencing the political behavior of recipient countries is an essential tool of Saudi foreign policy which enhances the support for Arab and Muslim positions globally. The Saudi Arabians look toward building a strong cultural and economic alliance with African countries. Development and cultural assistance at the government level, as well as outright donations and charities from Saudi citizens, is directed to the needy as an obligation to Al/ah and that He alone will reward the donors. Islam and Prophet Muhammad {Peace Be Upon Him} glorify those who sacrifice and seek reward from Allah as a pious objective. In Islam, both The Holy Qur'an and the Hadeeth (traditional sayings of the Prophet Muhammad {Peace Be Upon Him} encourage men and women in the public and private sectors to help the needy. An overview of what The Holy Qur'an and the Sunnah (traditional sayings of Prophet Muhammad {Peace Be Upon Him}) show that one can go to Heaven by helping other people. Some verses from The Holy Qur'an showing this philosophy include the following. Kind words and forgiving of faults are better than Sadagah (charity) followed by injury. And Alléh is Rich (Free of all wants) and He is Most Forbearing. (Surah 2:263) © you who believe! Do not render in vain your Sadagah (charity) by reminders of your generosity or by injury, like himwho spends his wealth to be seen of men, and he does not believe in Allah, nor in the Last Day. His likeness is the likeness of a smooth rock on which is a little dust; on it falls heavy rain which leaves it bare. They are not able to do anything with what they have earned. And Allah does not guide the disbelieving people. (Surah 2:264) ‘And whatever you spend for spendings (e.g, in Sadagah — charity, etc., for Allah's Cause) or whatever vow you make, be sure Allah knows it all. And for the Zélimin (wrong-doers, etc.) there are no helpers. (Surah 2:270) If you disclose your Sadagat (alms-giving), it is well, but if you conceal it, and give it to the poor, that is better for you. (Allah) will forgive you some of your sins. And Allah is Well- Acquainted with what you do. (Surah 2:271) (Charity is) for the Fugard (poor), who in Allah’s Cause are restricted (from travel), and cannot move about in the land (for trade or work). The one who knows them not thinks that they are rich because of their modesty. You may know them by their mark; they do not beg of people at all. And whatever you spend in good, surely Allah knows it well. (Surah 2:273) There is no good in most of their secret talks save (in) him who orders Sadagah (charity in Allah’s Cause), or Ma'rif (Islamic monotheism and all the good and righteous deeds which Allah has ordained), or conciliation between mankind, and he who does this, seeking the good Pleasure of Allah, We shall give him a great reward. (Surah 4:14) As-Sadagat (here it means Zakat) are only for the Fugard (poor), and A/-Masakin (the poor) and those employed to collect (the finds); and for to attract the hearts of those who have been inclined (toward Islam); and to free the captives; and for those in debt; and for Allah's Cause (i.e. for Mujdhidan - those fighting in the holy battles), and for the wayfarer (a traveler who is cut off from everything); a duty imposed by Allah. And Allah is All- Knower, All-Wise. (Surah 9:60) Take Sadagah (alms) from their wealth in order to purify them and sanctify them with it, and invoke Allah for them. Verily, your invocations are a source of security for them, and Allah is All-Hearer, All-Knower. (Surah 9:103)Know they not that Allah accepts repentance from His slaves and takes the Sadagdt (alms, charities) and that Allah Alone is the One Who forgives and accepts repentance, Most Merciful? (Surah 9:104) Verily, those who give Sadagdt (i.e. Zakdt and alms, etc.), men and women, and lend to Allah a goodly loan, it shall be increased manifold (to their credit), and theirs shall be an honourable good reward (i.e. Paradise). (Surah 57:18) © you who believe! When you (want to) consult the Messenger (Muhammad) in private, spend something in charity before your private consultation. That will be better and purer for you. But if you find not (the means for it), then verily, Allah is Oft-Forgiving, Most Merciful. (Surah $8:12) Are you afraid of spending in charity before your private consultation (with him)? If then you do it not, and Allah has forgiven you, then (at least) perform As-Saldt (Igdmat-as-Salat) and give Zakdt and obey Allah (i.e. do all what Allah and His Prophet order you to do). And Allah is All-Aware of what you do. (Surah 58:13) (Source: Khan and Al-Hilali (translators) 1995] The second source of guidance to Muslims in performing their affairs is the Sunnah with teachings and examples of the Prophet Muhammad {Peace Be Upon Him}. In the Sunnah, Muslims are exhorted as individuals (and to organize groups) to donate to the poor and alleviate poverty conditions. As a matter of fact, the third pillar of Islam (3 condition of being accepted as a Muslim) is to pay Zakat, which means charity alms (or in order to purify the increase in one's wealth). Muslims are pleased in following Allah's commands when they pay Zakat. The basis of Zakat is a person’s income held in one’s possession for one lunar year. The Zakat is 2.5% of the person’s income, due in gold, silver, or cash equal to about 85 grams of gold. How Zakat is distributed and to whom is beyond this study, but Zakat is one of the justice principles of Islam.According to the teachings of Islam, real happiness and peace can only be found in submitting to the commands of the Creator and the Sustainer of this World. The Holy Qur'an says; “Truly, in remembering God do hearts find rest (13:28), and “And Allah enjoins justice and good deeds” (16:90). On the other hand, those who do not follow Allah's words will have negative ‘consequences in their lives. Muslims, Saudi and non-Saudi alike, must give Zakat to the poor in order to fulfill the commands of Allah. The sayings of Prophet Muhammad {Peace Be Upon Him} provide the believer the assurances that his works will be rewarded. It says in many instances: Narrated Ab Huraira: The Prophet said, “There are seven whom Allah will cover with His shade on a day when there will be no shade but His (and he mentioned among them)-a man who gives charity so secretly that his left hand does not know what his right hand has given out.” (Zakat 4:508) Narrated “Ugba Bin ‘Aamir: I heard Allah's Messenger say, “Everyone will be under the shade of his Sadagah till the judgment between the people is finished.” (Zakat 4:509) Narrated Ab@ Sa’id Al-Khudri: The Prophet said: If any Muslim clothe a Muslim when he is naked, Allah will clothe him with some of the green garments of Paradise; if any Muslim feed a Muslim when he is hungry, Allah will feed him with the fruits of Paradise; and if any Muslim give a Muslim a drink when he is thirsty, Allah will give him a drink from the pure wine which is sealed to drink.” (Zakat 4:510) Narrated Hakim Bin Hizim: The Prophet said, “The upper hand is better than the lower hand; and start giving charity first to your dependents. And the best object of charity is that which is given by a wealthy person; and whoever abstains from asking others (for charity), Allah will make him contented and whosoever is satisfied with what Allah has given him, Allah will make him self-sufficient.” (Zakat 4:511) Narrated ‘Aisha: The Prophet said: “If a woman give (for charity) some of the food in her house, without being wasteful, she will have her reward for what she has given out, her husband will ulhave his for what he has earned, and the storekeeper will get the same. Yet nobody's reward will be deducted for another one's.” (Zakat 4:514) Narrated Abd Huraira: Allah’s Messenger said, “Sadagah does not reduce property. Allah increases the honour of him who forgives and no one will humble himself for Allah's sake without Allah raising him up.” (The Comprehensive Book 16:1324) Narrated ‘Abdullah Bin Salém”: Allah’s Messenger said, “O people, extend greetings, care for the well-being of your kindred, provide food, and pray at night when people are asleep, and you will enter Paradise in peace.” (The Comprehensive Book 16:1325) [Source: As-Sanani 1996]. Statement of the Problem This research is designed to provide a comprehensive review and analysis of Saudi Arabia's development and cultural policies toward SSACs between 1975 and 1995. These two decades are important because of they fall between critical economic periods in the world, notably sharp increases in oil prices in the 1970s and then a dramatic drop in oil prices in the 1980s. It is also important because it happened at a time when most of the African countries had achieved their independence and sought outside assistance and economic support from rich countries, including the United States, Europe, and Saudi Arabia. The study examines the effect of these two factors as they impacted development and Saudi Arabian development assistance, specifically the effects they had on Saudi economic assistance to SSACs through bilateral institutions, such as the Saudi Fund for Development (SFD), a government lending institution, and multilateral agreements with the Islamic Development Bank (IDB). The research will take into consideration three major phases that affected the political and historical relationship between Saudi Arabia and sub-Saharan African countries individually and collectively. 12The first phase covers the pre-colonial period, before Saudi Arabia was established, and helps explain how the Arabs are connected with the Africans as peoples of common heritage after the introduction of Islam. The second phase covers the colonial period, when Saudi Arabia held a neutral position—mainly during the colonization of Africa by Europeans. This section will document and explain the limitations of Saudi Arabia as an emerging country during the colonial period in Africa which itself had to ward off colonialism and leave alone Africa. The third phase looks at the era of independence of sub-Saharan African countries since the 1960s, where the development of Afro-Arab relationships in the post-colonial era is explored. Although formal relationships between Saudi Arabia and the SSACs began in 1932 when King Abdul-Aziz, founder of the Kingdom of Saudi Arabia, came to power, the most active Saudi involvement was in phases two and three. Purpose of the Study and Research Questions ‘The purpose of this study is to look at the Saudi Arabian involvement in Africa with special focus on the following questions: 1. How has the relationship between Saudi Arabia and African countries evolved since the ruling family (Al-Sa'ud) came to power? 2. What type of assistance does Saudi Arabia have in sub-Saharan African countries? 3. What are the financial commitments of Saudi Arabia to achieve its Islamic commitments toward the poor in Africa? 4, What are the policy objectives behind the Saudi Arabian government's helping the SSACs? 5. How does Saudi Arabia’s commitment differ from that of Wester countries? B6. What is the impact of multilateral institutions’ aid, such as that of The World Bank? 7. What are the economic and political influences shaping bilateral and multilateral institutions in development assistance? 8. What was the role of the Saudi government in establishing the Organization of Islamic Countries (OIC) and the Muslim World League (MWL) as partners in Islamic unity and development assistance? 9. What is the major role of Saudi Arabia in promoting its policies and development assistance within the OIC and MWL organizations? Hypotheses The people of the Arabian Peninsula have been interacting with Africans living in sub-Sahara Africa for thousands of years. As a dominant power in the Red Sea area, Saudi Arabia has been the bridge between Islam and Africa. The pilgrimage to Makkah (Hajj) and continued trade with Africa have contributed to this special relationship with Africa. Muslims and Arabs have shared cultural and religious backgrounds through education, mainly The Holy Quran. 1. The first hypothesis, therefore, is: “Saudi Arabia's Islamically inspired ‘foreign policy has led her leaders to accept an obligation toward Muslims around the world, and toward African Muslims in particular.” Saudi Arabia tends to enhance Islamic brotherhood and solidarity, especially among Africans, through her cultural policies. 2. The second hypothesis, is that, besides its bilateral assistance, “Saudi Arabia has played and continues to play a significant role in assisting the poor 14through other direct multilateral development assistance programs in Africa.” The focus of these programs is directed toward self-help and community-based development projects, such as digging wells, farming, health, and education. 3. The third hypothesis is: “The combination of Saudi Arabian oil resources and interest in the welfare of Muslims has a stronger impact on its cultural and development programs for the sub-Saharan countries than other development strategies.” Limitations of the Study This study discusses the development and cultural policies of Saudi Arabia toward SACs. It covers the historical background of the relationship between the peoples of the Arabian Peninsula and sub-Sahara Africa. The lack of primary data has limited the scope and outcome of the study. This is mainly due to the scanty written literature on Saudi foreign aid to sub-Sahara Africa. Most of the extant information covers Arab-African countries north of the Sahara. Collecting and analyzing primary data in Saudi Arabia is difficult and stressful to obtain and takes time to assimilate. Thus, the study depended on secondary data from limited sources. In some cases, formal letters were submitted to government officials asking them to declassify the information. Moreover, it is difficult to obtain data from recipient countries due to divergent reporting systems and secrecy. Delays ensued, even though this work would benefit the country as well as its position in the world. Investigation of every aspect of the region is impossible and in many ways would have hampered the timely progress of this study. 15,This study does not focus on all African countries, but specifically on sub- Saharan African countries. As such, the study sought to elaborate on Saudi development assistance and its cultural policy toward SSACs as a whole. The study does not examine the development and cultural policies of Saudi Arabia with individual sub-Saharan countries. However, selected SSACs were reviewed to give an overall understanding of such policies. The discussion of the impact of Saudi ‘economic assistance on SSACs focuses on the period from 1975 to 1995. Data collected after this period are used to update facts and figures as needed. This study reviews the relationship between the Kingdom of Saudi Arabia and SSACs only, not the whole continent or that of all Arab countries toward Africa. While the study is on SSACs as a whole, it only reflects the Saudi perspectives and its own policies. It is not the researcher’s intent to investigate the attitude of the SSACs toward Saudi Arabia’s leadership and in¢ ividuals per se. In reference to Saudi Arabian development assistance to SSACs, this research briefly reviews the pros and cons of Western countries’ foreign aid, and the ‘multilateral institutions that are dominated by the United States and European countries in dealing with poverty alleviation. In studying economic assistance, the focus is on how Saudi Arabian economic assistance helps these countries reduce poverty by use of different economic tools than other standard Western multilateral approaches. Beyond the focus and scope of this research is also how Saudi Arabian foreign policy toward SSACs compares with the policies of the G-8 countries, e.g., the United States and European nations. 16Importance of the Study The global economic system is divided into two parts: developing, or so-called Third World countries, and developed, or so-called Western countries. Some politicians and economists divide the globe according to the location of the country: Northern Hemisphere (developed countries) and Southern Hemisphere (less developed countries), Because the Kingdom of Saudi Arabia and the countries of Africa are both located in the Southern Hemisphere, they are all considered LDCs. Saudi Arabia and Africa bave rich histories and many natural resources. People from these two regions have been traveling back and forth for thousands of years, especially because Saudi Arabia is the home of the two holiest mosques of the Muslim world, Makkah, where the Ka’bah was built, and Madinah, where the first mosque is located. People from the Arabian Peninsula had many historical trade connections with Aftica well before Islam, but the relationship became stronger after Islam was introduced to Africa, and especially to the countries located along the Red Sea, such as Egypt, Sudan, Ethiopia, and Somalia. This research is important, because it is intended to explain the economic and political significance of Saudi Arabia's development and cultural policies toward sub- Saharan African countries. It explores the engagement of the Saudis with those countries, helping them connect with other Islamic nations. The findings of this research are expected to add to the literature on cultural policies where Saudi Arabia plays a major role in uniting Muslim countries in general, and SSACs in particular. One of the mechanisms for this partnership is the direct participation of Africans in 17two major non-governmental Muslim organizations, the OIC and the MWL. There are many advantages for Saudi Arabia and SSACs to work together and collaborate in the area of development and cultural policy, as both sides will benefit from each other politically, economically, and culturally. The significance of this research lies in its importance as a tool to examine the strategic objectives behind Saudi economic aid to SSACs. It will answer the question whether this aid is because of Islamic solidarity or whether it is it to increase Saudi national security and build alliances. In addition, the research identifies the motivations behind Saudi assistance policy toward SSACs, particularly its development assistance. It is important because it provides systematic analyses and lessons learned to understand development assistance from the perspective of a Third World country and not from a developed country’s point of view. This study is expected to contribute to the literature on Saudi Arabian foreign policy and development and cultural assistance toward SSACs by synthesizing the available primary official sources and newspaper resources. Assumptions The first assumption of this study is that the involvement of the Kingdom of Saudi Arabia in SSACs falls under the category of a South/South relationship. Although some analysts separate the oil-producing Gulf states from the developing countries, it is assumed here that Saudi Arabia is accepted by the African states as a fellow Southern country despite its oil wealth. The second assumption of this study is that the ultimate objective of the involvement of Saudi Arabia with SSACs is to increase Islamic solidarity among Muslims and to advance political, diplomatic, andcultural exchanges. The third assumption of this study is that it is conducted on the relationship between a single country and a given region, drawing on data about certain variables. It is assumed that Saudi-Aftican relations can be understood through a study of selected African countries, that can serve as a model for policy analysis and alternative development assistance in Africa. Literature Review The literature available on Saudi Arabian development and cultural foreign policy is fairly abundant. However, the literature on Saudi foreign aid toward African countries south of the Sahara is limited to the major North African Arab countries, such as Egypt and Morocco, but they are not comprehensive studies. Few studies have been published about Saudi foreign policy toward SSACs. Those available include the works of Sulayman Nyang, an Aftican scholar who is an expert on Saudi Arabian foreign policy. Nyang’s article “Saudi Arabia Foreign Policy Toward Africa” (1982) discusses Saudi foreign policy during the political conflict between King Faisal and Gamal Abdul Nasser (Egypt's President) in the early 1970s. This article is referred to throughout this study; it synthesizes the available primary official sources and newspaper resources on Saudi Arabian assistance policy toward Affica. According to Nyang (1982:10-12), Saudi Arabia had no interest in interfering with SSACs because they were under colonial rule and most of them were very unstable. Before 1960, it was disadvantageous for Saudi Arabia to interfere with colonizing countries such as Great Britain and France. No major studies exist on Saudi foreign policy toward Africa before 1960. While there have been numerous dissertations on Saudi development policies, few of them review relations between 19Saudi Arabia and one region, such as the Affican continent, and even fewer are devoted to Saudi Arabia and SSACs. The surge in oil prices in the early 1970s transformed Saudi Arabia from a semi-peripheral state into an influential regional power. The sudden rise in income made Saudi Arabia’s foreign policy essential, especially to neighboring countries, including sub-Saharan African countries. Saudi Arabia's foreign policymakers used the country's wealth to strengthen its relationship with Affican countries through two main components, sharing Islam and foreign aid. It is not surprising that Islam plays a critical role in Saudi Arabia’s foreign policy, because Saudi Arabia is the location of the two holiest sites of the religion, Makkah—the location of the holy Ka‘bah, toward which more than a billion Muslims from around the globe face five times per day when they pray—and the city of Madinah, where the graves of Prophet Muhammad {Peace Be Upon Him} and many of his companions are located. Thus, pro-Islamic beliefs and moral teachings and values, rather than political ideologies like Communism or Marxism, have shaped Saudi foreign policy. Nyang (1982:5-8) states that the huge Saudi oil reserves enhanced the country’s power economically and politically. ‘Thus, most African countries find it much to their advantage and very useful to build good relations with the Kingdom. He states that rapid changes in Saudi policies, especially in its cultural and political aspects, have changed its behavior, learning curve, adaptability, and flexibility. After the assassination of King Faisal in 1975,! Saudi authorities continued the “Faisalism” policy. King Faisal left the country in a very powerful foreign affairs position. After " King Faisal was assassinated by a mentally unstable nephew. The incident was unrelated to foreign or international policies or state affairs. 20the coup in Ethiopia in 1974, when Ethiopia became a Marxist state, Saudi Arabia encouraged its allies, such as the United States and Great Britain, to get involved, as other African and Arab countries, such as Angola and South Yemen, were embracing Communism. Saudi Arabia tried to bring to the attention of the United States the dangers of the Soviet Union in the Middle East region. Also, the Soviet invasion of ‘Afghanistan in 1979 alarmed the Saudi government because of Soviet anti-Islamic policies and their influential Communist ideology in Muslim countries. According to Gilpin (1987:296-297), Saudi Arabia emerged as a center of power in the region as well as in the world in the 1970s. By 1973, the center of power had shifted from the United States and its multinational petroleum companies to Saudi Arabia. Gilpin states that Saudi Arabia has controlled the world’s energy markets since the 1970s. During King Faisal’s rule, known as the “golden period” in Saudi Arabian history, Saudi Arabia used its oil power to satisfy the country’s needs as well as those of Muslim peoples around the world, The country used its wealth for development and to increase its national security. Spanier (1985:221-99) describes Saudi Arabia’s foreign policy as the ability to maintain high oil production and command high prices even if the United States does not find solutions to the conflict between Arab countries and Israel. Saudi Arabia’s foreign policy in the early 1950s was shaped by the Arab-Israeli conflict. On the other hand, Spanier states, Saudi Arabia was not the enemy of the United States, because both countries cooperated in order to assure stability in the region. He adds that domestic instability, regional conflicts, and the growth of Soviet-Cuban influence in Ethiopia concerned the Saudi Arabian government. Saudi Arabia’s foreign policy was 21aimed at eliminating the expansion of Soviet influence in the area, especially on the strategic Red Sea and the Hom of Africa, The Soviet Union tried to control the southern entrance of the Red Sea and its important oil routes. Saudi Arabia was uncertain of the Soviets, especially when they supported the Marxist regime in Ethiopia in overthrowing Emperor Haile Selassie. In addition, seeing thousands of Cuban troops just across the Red Sea, Saudi Arabia warned the Western countries about the dangerous situation in the area Sillah (1988:140-145) describes Saudi Arabian foreign policy and its demonstration of pan-Islamic solidarity with several African countries. During the Ethiopia-Somalia War in 1974, Saudi Arabia supported Somalia against Ethiopia and prevented Soviet influence from spreading across the Red Sea. The Saudi government provided SR600 million to Somalia's president, Muhammad Siad Barre. This was considered to be another area where Islam was used as a tool of Saudi foreign policy toward SSACs. David Ottoway (1978), in his article “Saudi Arabia Cool to US African Policy,” states that the Kingdom was becoming “one of the sharpest overseas critics of US-African policy of courting favor in Black Affica by refusing to meet head-on the growing Soviet-Cuban challenge” (Nyang 1982:5). The government of Saudi Arabia accused the US administration during Carter's presidency of not responding to the threat of radicalism supported by the Soviet Union (Spanier 1985:284-285). Hussein (1995:405-412) describes Saudi Arabian alliance behavior by illustrating the failure of Saudi foreign policy toward neighboring countries such as Iraq, Jordan, and Yemen. Saudi alliances with these countries were inconsistent dueto ideological conflicts. Limited in national capabilities and threatened by the expansion of revolutionary regimes in the area and by the nature of Middle East politics, Saudi Arabia had no choice but to build regional alliances. However, Iraq's invasion of Kuwait, creating the Gulf crisis of 1990-1992, was a shock to the Saudi authorities. Saudi foreign aid to neighboring countries such as Jordan and Yemen and ‘groups such as the Palestine Liberation Organization (PLO) failed to convince them to come to its side during that time, The Saudis responded by reexamining their foreign policy and by building new alliances. While limiting US decisions in Africa, Saudi leaders tried to build their own network of supporters and allies on the continent. Prince Saud Al-Faisal expressed deep sympathy for what was happening in the SACs. He noted that, in that part of the world, African leaders needed to face many challenges and work together toward the future of their countries and people so that development could occur. He asked for peace and stability on the continent and stated that Saudi Arabia’s foreign policy challenged globalization. He asked countries in the area to change their domestic policies in order to maximize their benefits and minimize their losses. Prince Saud stressed that an open economy through free trade and expanding exports and imports would improve relations between the countries and benefit people on both sides (Summit of Non-Aligned Movement, 1998). Scholars writing on Saudi Arabian foreign policy have focused most of their studies on Saudi Arabia’s policy toward influential countries such as the United States. Others have covered the foreign policy of individual leaders of the Kingdom, such as King Faisal. Marwah Alsa’igh (1972:15-45) discussed King Faisal’s foreign policy 23regarding Africa south of the Sahara. She covered King Faisal’s trips to Africa, particularly those to Uganda, Chad, Senegal, Mauritania, and Niger in 1972 (1392 AH). Alsa’igh described the foreign policies of King Faisal as building good relationships with African countries south of the Sahara. A main objective of King Faisal’s trips was to enhance Islamic solidarity and brotherhood, while other objectives were to war the African states against Zionism and colonization. Another useful work on Saudi-African relations is by Anthony Sylvester (1981:17-23) who notes that the Saudis and Africans have long-term interests and ‘warns that they must not allow problems and obstacles to jeopardize their partnership. Sylvester discusses the willingness of both sides to overcome their problems and he emphasizes the need for Saudi and African political solidarity by supporting each others’ causes. Africans showed their sympathy toward the Palestinians’ and Arabs’ support to end apartheid and segregation in South Aftica. According to Sylvester, ‘Afro-Arab solidarity increased when both sides agreed to correlate Zionism with apartheid and Israel with South Africa. Sylvester (1981:49) notes that Arab countries have been helpful in African countries’ development by supporting them financially, particularly with capital finds. He also notes that even though Africans have the natural resources and the Arabs have the capital flow, development does not occur without a third party, such as a Western country. He states that both sides were in desperate need of Western technology and expertise. Saudi assistance to African countries is mostly concentrated in the infrastructure sector, building hospitals, clinics, schools, airports, and highways, but. 24not in importing computers, bringing in high technology devices, or investing in the aerospace industry. Its financial assistance to SSACs helps them to alleviate poverty and provides hard currency to fix the exchange rate of the national currency. Sylvester (1981:195) notes that Arab aid to Africa ranges from political self-interest to humanitarian efforts. Afticans benefited from Arab petrodollars, especially after the sharp increase in oil prices in 1973. Non-Arab African countries also benefit from Arab financial assistance because many non-Arab African countries have a considerable Arab ethnic minority and because Islam is practiced by non-Arab Africans in the region. Saudi Arabia’s foreign policies are influenced by its strong religious beliefs. ‘The Kingdom recognizes the need to organize and facilitate aspects of Islam. The Ministry of Foreign Affairs takes the position that all Saudi embassies around the world have Islamic departments responsible for promoting Islam and looking after the needs of Muslims in the host country. In addition to their diplomatic obligations, the embassies in African countries have two other major roles: to look out for and protect ‘Muslim activities and needs and to support Muslims’ economic needs. Scholars like Yusuf Al-Sallom (1997), the former Saudi ambassador to Kenya, notes that the main principles of Saudi Arabia’s foreign policy are Islamic solidarity and Arab unity. Saudi Arabian foreign policy is recognized by its active involvement in national and international organizations such as the United Nations, the Arab League Council, and the Gulf Cooperative Council. It should be noted, however, that Saudi Arabia’s policies do not interfere in any other country’s domestic affairs (Al-Sallom 251997:5-37). However, this does not mean that Saudi Arabia's foreign policymakers will not protect the Kingdom’ national security. Al-Zehrany (1982:67-81) states that the main objectives of Saudi foreign policy toward SSACs are to defend Islam, prevent the spread of Communism to Arab and Muslim countries, and to build alliances with African countries in the UN and in other international organizations. Also, Saudi Arabian authorities have tried to have a relationship in terms of a South/South direction instead of North/South (developed countries/undeveloped countries). He also stated that Saudi leaders supported African ‘countries such as Eritrea and Somalia against the Communist government in Ethiopia supported by the former Soviet Union and Israel. Saudi Arabia also tried to stop the influence of Israel in Africa and cement Arab-Affican relations in place of Israeli- African relations. Al-Eisa (1986) describes Saudi policy toward the SSACs by saying that it was the first time in the history of Saudi Arabia that its citizens and the government cooperated to contribute to the victims of famine. The Saudi government received several appeals from Saudi volunteers who were visiting the area of poverty, such as Somalia and Ethiopia, and several recommendations from different ministries, such as Interior, Foreign Affairs, and Finance, urging the government to help their brothers and sisters in these countries. The Saudi government responded to these appeals by issuing a Royal Decree (No. 2871) on December 2, 1984. The Decree established a committee consisting of six cabinet ministers who supervised the contributions. The Decree made the Red Crescent responsible for distributing contributions to victims of 26the famine. The committee's main business was to motivate people to pledge and participate to the campaign (Al-Eisa 1986:82-93) According to Alfarsy (1992:36), Saudi Arabia has been one of the leading donors of foreign aid since 1974. Saudi Arabian foreign aid in both relative (as measured by the percentage of GNP contributed in foreign assistance) and in absolute terms comes right after the United States, and Saudi Arabia is considered to be a leading country. Saudi foreign aid is spent to address the needs of developing countries through bilateral and multilateral agencies. A large portion of the Saudi aid programs focuses on social and economic problems in Africa (Alfarsy 1986:236). Huntington (1996) states that Saudi Arabia is the original home of Islam (Islam's holiest shrines are there), its language is Islam's language (Arabic), and it has the world's largest oil resources and the resulting financial influence. Huntington (1996:175) notes that King Abdul-Aziz, the founder of modem day Saudi Arabia, succeeded in large part in uniting the Arabian tribes and creating tribal coalitions through marriage. He notes that during the 1970s and 1980s, Saudi Arabia was the most influential force in Islam. It spent billions of Saudi riyals (dollars) to spread Islam and support Muslim causes throughout the world. Saudi Arabia uses many methods to accomplish its cultural policy, such as building mosques, distributing textbooks, and supporting political parties and Islamic organizations. In 1993, there were about 10,000 Islamic centers around the globe, mostly funded by Saudi economic power. According to Huntington, these centers gave Saudi Arabia the opportunity to influence Muslim youth, whose numbers have increased in most Muslim countries. However, according to Huntington's understanding, these Muslim 27youth are a great challenge to the Western civilization; therefore, since Saudi Arabia supports Muslims around the world, including youth, it is an enemy to Westen lization and the West in general. Doees (1991:85-128) states that Saudi Arabian development assistance aid is greater than US assistance in both quality and quantity. Saudi Arabian development assistance is viewed in South/South terms, which makes it more acceptable to recipient countries than that from the rich North to the poor South. He describes Saudi Arabian development assistance to Africa as humanitarian, religious, economic, and ideological. In the period from 1973 to 1981, 29 non-African Arab countries received generous assistance, totaling $1.286 billion. He notes that development assistance should benefit the recipient countries the most; however, in the case of US aid, the country given the aid is mainly providing an opening to give the US access to its commodity products. Villalon and Huxtable (1998) discuss African tragedies and the African states moving toward the 21* century. They argue that, even though there was a wave of progress moving toward democracy in some African states, there were significant differences among states in adapting to the change. African states vary in the degree of change of their institutions and political systems. The concept of critical juncture, which has been defined as “a period of significant change, which typically occurs in distinct ways in different countries and which is hypothesized to produce distinct legacies,” is considered to be one phase of post-colonial African history. Villain (1998:163) states that African states in the post-Cold War era are currently facing a critical juncture. It could be religion—Islam in Senegal, Catholicism in Uganda—orwomen in Kenya. Affican states. especially those in the sub-Saharan region, are experiencing famine, increased oil prices, arms sales, and non-democracy status African countries have huge debts, which results in dependency on international financial institutions (IFIs). Affican countries are no longer trusted and depend on ‘Western countries such as United States. Creditor aid has played a critical role in their sovereign status, but most of the money from bilateral donors, such as the IMF and ‘The World Bank, goes to service external debt or to pay foreign contractors for their services. African countries, especially those in the sub-Saharan region, have deficits in their balance of payments and shortages of foreign currency, and they require crucial imports, such as fuel, medicines, and spare parts. Reno (1998) discusses post-Cold War warlord politics and African states that experience internal and external pressures for the state to change. The loss of external economic and diplomatic support, in addition to changes in the global market, isolated the African states, leading to pressure on their internal policies. Thus, the IMF, The World Bank, and other aid donors maintained the right to impose conditions. Reno (1998:147) notes the corruption of some African leaders such as Mobutu Sese Seko, who governed Zaire for more than two decades (1965-1997). Mobutu used internal resources, most importantly diamonds and gold, and outside sources such as IMF loans (which retumed to Zaire in 1983 after a five-year absence) for his personal use. Reno also states that even those Aftican leaders who followed the advice of the IMF and The World Bank face internal opposition, which, in some cases, cursed the presidency. For example, Sani Abacha, a former president of Nigeria, took office after Shonekan in November, 1994, following his election in June, 1993. Shonekan’s 29efforts to meet The World Bank reforms, such as raising the price of fuel, led to the removal of subsidies, which contributed to the collapse of his rule. Edoho (1997) has a negative view of Third World countries in general and SSACs in particular. He states that the 1980s was Africa's lost decade, and that from all indications the region was also losing out in the 1990s, with the worst still to come. Disagreements will remain, he says, when injustices are solved, and the fights will remain, since there is injustice between the North (rich}—which has the technology— and the South (poor)—which has the resources. Edoho (1997:139) says that the Cold War between the East (Socialist) and the West (Capitalist) did not exceed threats or the facing of missiles at each other. It did not cause battlefield engagements on either’s land—all wars fought since 1945 have been in the Third World region. According to Reno, since 1945 there have been over 120 wars with 20 million deaths; between 1963 and 1992, over 30 proxy wars took place in Africa alone. Edoho reviews the economic development of some major African countries, such as Nigeria, Kenya, and Zaire. He notes that African countries are basically specialized only in commodities while the advanced, industrialized countries are focused in the technology sector. From 1950 to the present time, there have been dramatic changes in commodity prices, which are falling while technology prices are increasing dramatically, with the exception of the oil price boom in the 1970s. Leys (1996:19) states that SSACs have been receiving economic assistance since the independence era in the early 1960s, However, no positive signs have been noticed in their economic situation. Sub-Saharan African countries still face economic crises, including poverty, drought, budget deficits, and inappropriate fiscal and 30monetary policies. Many African countries have poor monetary policies, which result in disequilibrium, As a result, they have high debt from IFIs. Thus, they have to borrow more money in order to pay the high debt, which leads to more economic crises. The economic crises in SSACs have become worse by any measure of per- capita income and by a debt service burden that rose from 11.8% in 1980 to 24.5% in 1992. Leys notes that the economic situation in many African countries forces them to stop paying their debts because in some cases the debt service is equal to the GDP of the country, as in the case of Sudan. Some countries decided to stop paying the IFI unless they could get some relief, This new economic phase has become a critical issue in terms of development of Third World countries in general and in sub-Saharan African and Latin American countries in particular. The countries in the new economic situation are known in the literature as high-intensity borrower countries, where the wealthy countries agree to remove some of the debt if the country will follow the advice of the IMF and The World Bank. Smith (1996) discusses the economic situation of Third World LDCs. Most Third World countries are poor by international standards. The gap between Western, or developed countries and other regions, Third World and developing countries such as those in sub-Saharan Africa, has widened. Developing countries are living in poverty; some of them are extremely poor. Smith (1996:63) defines the Third World as a group of countries that have colonial histories and are in the process of development, both economically and socially, from a status characterized by low income, dependence on agriculture, weakness in trading relations, social deprivation for large segments of the society, and restricted political and civil liberties. In other 31words, Third World countries are very similar to one another. Thus, the SSACs fall into this group and are called Third World countries. According to Smith, the greatest measurement used to know if a country belongs in this group is income. Yet Smith, like other scholars, does not provide a cure or solution but generally leaves them in a bottleneck or a “vicious circle.” The literature shows that foreign aid is a major tool in Saudi Arabia's foreign policy. However, it has not always successful. Al-Sugair (1993) notes that there are doubts about Saudi Arabian foreign aid. Saudi foreign aid may have a limited effect on its foreign policy. He notes that Jordan's failure to support Saudi Arabia during the Gulf crisis surprised Saudi authorities. Jordan and Iraq misinterpreted the motives behind Saudi aid and took it as an obligation (Al Sugair 1993:203-247). Methodology This research employs a general descriptive analysis of Saudi Arabia’s foreign policy toward SSAC. The motives and objectives of the Saudi foreign policy are discussed and analyzed. This research employs four techniques: statistical, analytical, historical, and informal interviews (open ended). A statistical approach was used to describe the economic assistance to SSACs. Drawing on data from the SFD and the IDB, the researcher then analyzed the nature and effects of such assistance to SSACs. The third approach is historical. Through this approach, the relationship between the people of the Arabian Peninsula and those south of the Sahara Desert is traced from the birth of Islam and the beginning of merchant trading between Saudi Arabia and Africa. The fourth approach is the use of open-ended interviews to collect and record Saudi 32officials’ opinions and attitudes about Africa. Informal interviews were conducted with government officials, the head of the MWL, and Saudi officials in the Ministry of Foreign Affairs, the Saudi Development Bank, and the Islamic Development Bank. In addition, several telephone calls were made to obtain information about sub-Saharan African countries. In the summer of 1998, officials of the Ministry of Finance and the SFD were interviewed. A number of projects, including Saudi Arabian efforts for poverty alleviation in SSACs, were discussed and copies of the annual reports of the SFD were obtained. In addition, personnel from the Ministry of Foreign Affairs, especially the economic and consular departments, were interviewed, and Saudi Arabian foreign policy toward SSACs was discussed. Books and students’ research papers from the library of the Saudi Diplomatic Institute were also reviewed. This research study benefits from both qualitative and quantitative analysis. Primary sources, such as government documents collected from the Ministries of Finance, Foreign Affairs, and Islamic Affairs, were examined. Documents were obtained from the Embassy of Saudi Arabia Information Center and Cultural Mission in Washington, DC, and from the United States Library of Congress, Division of Middle Eastern and African Studies. Data were also available in several university libraries, especially at Howard University, The George Washington University, and Georgetown University. In addition to the primary sources, secondary sources were examined, including books, doctoral dissertations, periodicals, journals, Internet sites, newspapers, and magazines. 33Glossary of Terms A glossary of terms is offered, which needs to be understood not so much in Wester society's understanding of the English language, but rather in both context of the Arabic language and the way adherents of Islam understand the meanings of the words that are used throughout this thesis. Let us first begin with the main subject and concem of all worshippers in Islam, “Allah.” This is the formal name of God in Islam (Allah), and the meaning would be understood by any Arabic speaker as ‘the Worshipped.’ This word comes from the root ‘elak’ meaning ‘that which is worshipped.’ The plural of ‘elah’ is ‘elaha;’ however, ‘Allah’ is a unique word in Arabic, and as such it has no plural form, nor does it allow for gender. It cannot be made to convey a meaning of ‘gods’ or ‘goddesse: Not all Muslims are Arabs and not all Arabs are Muslims. The meaning of the word “Allah” to any Arab speaker, whether of the Jewish, Christian, or Muslim faith, is always going to be understood to mean ‘the One God of the Universe.’ ‘Islam’ is more than just an Arabic term, more than just a simple word for a religion. In the Arabic language, it is used as a nominalized verb, or action-based word, drawing on five principal meanings that originate from the root ‘sim.’ The ‘meanings arising from this root are: surrender, submission, obedience, purity, and peace. The word “Islam” is understood to mean “total surrender (to Allah) in complete submission to His conditions, and obedience to His terms, purely for His sake alone and in total peace of mind and heart without any reservation or secret evasion of mind.” 34Muslims are not named after the Holy Prophet Muhammad {Peace Be Upon Him}, and Islam does not convey the same kind of meaning to Muslims as the word Buddha does for Buddhism. It is at once a complete way of life, governing the actions of the follower of Islam, from awakening in the morning to sleeping at night (everything that occurs in the life of a follower of Islam from birth until death—cradle to grave). Islam describes the actions that are intended to establish a proper working relationship between a follower of Islam and his Creator and Sustainer (Allah). The ‘one who performs an action of Islam, would not be called an ‘Islam-er,” as would be the treatment in English, but rather, he/she is a mu-Islam or Muslim. The word Muslim simply means ‘one who practices or follows the teachings of Islam.’ As English provides the suffix ‘-er’ to the end of a verb to indicate the one who performs the verb, so Arabic provides the prefix ‘mu’ in front of the verb to indicate the one doing the action. From this explanation, we understand that anyone who recognizes that there is only the One True God of Adam, Abraham, Moses, Jesus, and Muhammad {Peace Be Upon Them All}, and that person is also willing to totally and completely submit and surrender in peace to His Will, enjoin what is right, forbid what is wrong, and perform the duties incumbent on a believer in Allah, then that person is a ‘mu-Islam’ ot Muslim. The condition of the heart of the person would be the only matter to be taken into account, to ultimately decide whether or not he or she is in fact a Muslim. As such, he or she tries to make choices and decisions that are in harmony with the Creator and Sustainer (Allah). This is irrespective of whether or not 35the person knows the Arabic language or has even read the Holy Book of Allah, The Holy Qur'an. The word ‘Qur'an’ actually means recitation, as in poetry or literature. Frequently it is mistranslated into English for the English word ‘read.’ But this is only correct if you consider that the English word ‘read’ also means ‘recite.’ The distinction needs to be made to understand that Muhammad {Peace Be Upon Him} did not know how to read or write and, therefore, could not have read The Holy Qur'an or recorded it. The Holy Qur'an is a perfect work of literature in the Arabic language, and is used by both Muslims and non-Muslims in teaching classical Arabic and for presenting the grammatical beauty that, to this day, has never been matched in Arabic or any other language. The Holy Qur'an is only considered to be ‘Qur'an’ if it is in the original language. It has been memorized, starting with Prophet Muhammad {Peace Be Upon Him}, by millions and millions of people (to this day) from cover to cover, absolutely perfectly. Most of those who memorize it today are not even Arabs, and in many cases The Holy Qur'an is the only Arabic that they know. The beautiful style and prose of The Holy Qur'an has caused even non-Muslims and non-Arabs to stand still in their tracks and shiver while their eyes fill with tears during the recitation of this Book in a language they do not even understand. This in itself must cause one to reflect on the amazing status that The Holy Qur'an must have with those who truly understand its deep meanings in its original tongue. The Holy Qur’an was revealed over 1,400 years ago to Prophet Muhammad {Peace Be Upon Him} over a period of 23 years in bits and pieces as Allah willed. 36‘The readings first began in Makkah and were conveyed to Muhammad {Peace Be Upon Him} from the Archangel of Allah, Jibree! (Gabriel in English). The first words are: 1. Recite! In the name of your Lord Who has created (everything). 2. He has created mankind from a clot (tiny speck of coagulated blood). Recite! And your Lord is the Most Generous. He Who has taught the use of the pen. He Who has taught man that which he did not know. [Holy Qur'an 96:1-3}. wae Muslims consider The Holy Qur'an to be the literal words of Allah. It is never taken lightly, nor are any jokes about it acceptable. Even a misprint of a single letter in any copy will be cause for the copy to be destroyed either by fire or by shredding and then by burying it. During the time of the Khilafah (caliphate, Islamic Empire), the great /mam Malik of Madinah (8™ century CE) declared that if anyone desecrated or disrespected The Holy Qur'an, it was sufficient to bring about capital punishment. This may perhaps enlighten those in the West to the seriousness of the matter of people like Salman Rushdi, who insulted The Holy Qur'an in his book The Satanic Verses. Muhammad {Peace Be Upon Him} is considered by Muslims around the world to be the last and final prophet of Allah and a descendent of the family of prophets from Ibrahim (Abraham) {Peace Be Upon Him}. As we will be referring to the teachings of Islam throughout this work, it is necessary to mention that, in addition to The Holy Qur'an, Muslims revere the teachings of Muhammad {Peace Be Upon Him}. Muslims hold that as The Holy Qur‘an commands them to ‘Obey Allah and obey His Messenger [Muhammad] (Peace Be Upon Him} that the Sunnah (ways, 37teachings, and habits of Prophet Muhammad {Peace Be Upon Him}) are also a vital part of interpreting The Holy Qur'an and understanding how to implement Islam. The Sunnah is recorded in books called ‘Hadeeth’ (pl. ahadeeth), or ‘stories’ or ‘narrations.’ These do not have the same beauty and style as The Holy Qur‘an, nor were they as perfectly preserved as is The Holy Qur'an. However, the Hadeeth, all well recorded and authenticated, are still known today as the most reliable of these sayings and represents a major part of the understanding of Islam. Zakat means ‘purification’ and is intended to mean the purification of one's wealth by paying ‘alms tax’ to the poor and needy. This tax is applicable to the amount of wealth held for a period of one lunar year or more. This is not comparable to an income tax for two reasons: (1) it is not based on the income or expenses of the person or company; and (2) it is only to be used for those who are in special need. Zakat is a form of redistribution of wealth to discourage hoarding and greed. It is collected on an annual basis and is an obligation on each and every Muslim regardless of where he or she may live in the world. Zakat will be shown to be an important factor in this study, especially as it relates to Saudi and African ‘governmental policies. Now the reader may have a better understanding of the terminology used in this dissertation and better understand the perceptions of the Arab and Muslim mentality with regard to these frequently used, but seldom understood, terms in their proper context. Periodically, these terms will be reintroduced and reiterated to prevent falling back to the incorrect understandings usually applied by those of the West. 38Definition of Acronyms In order to understand the meaning of various terms and abbreviations, the following are identified. Hajj The annual Islamic pilgrimage to Makkah, one of the five pillars of the Islamic faith. Abbreviations used in this research include: AMSA BADEA GDP GNP HIPC DB TI mc TRO Lpc MWL NIC OAU ODA oIc OPEC African Muslim Students Association Arab Bank for Economic Development in Africa Gross domestic product Gross national product Highly indebted poor country Islamic Development Bank International financial institutions Islamic investment companies International Islamic Relief Organization International Monetary Fund Less-developed country Muslim World League Newly industrialized countries Organization of African Unity ‘Overseas development assistance Organization of Islamic Countries Organization of Petroleum Exporting Countries 39SAAFA SED SR SSACs UNCTAD UNECLA. UNESCO. UNICEF WAMY § 8 § Special Arab Aid Fund for Africa ‘Saudi Fund for Development ‘Saudi Riyal (US$1 = SR3.75) sub-Saharan African countries Third World countries United Nations United Nations Conference on Trade & Development United Nations Economic Commission for Latin America United Nations Educational, Scientific, and Cultural Organization United Nations International Children’s Educational Fund United Nations Industrial Development Organization ‘World Assembly for Muslim Youth World Health Organization World Islamic League World Labor Organization 40CHAPTER II. KINGDOM OF SAUDI ARABIA - A HISTORICAL REVIEW Introduction Contemporary Saudi Arabia evokes many images and stereotypes in people's minds: oil, camels, deserts, wealth, sheiks, Bedouins, and veiled women. The images of Saudi Arabia lodged in the Western mind are a confused mixture of fact and fable. They begin with the residue of tales from the book, A Thousand Nights and A Night (The Arabian Nights), read in childhood. Another image is of thousands of white-clad pilgrims crowding into an ancient mosque in Makkah. Yet the Kingdom of Saudi Arabia represents much more than that which is shared with the world, and it conjures up opportunity and achievements. Saudi Arabia is very different from the stereotypical images, which some people take as fact (Saudi Arabia: A Kingdom in Transition, 1993). The Kingdom is important to the world as the center of Islam and for its economic power. Saudi Arabia is where more than 1.5 billion people face five times a day in their prayers. Muslims around the world face toward the Ka'bah in Makkah, as itis the first of the two holiest sites in the Muslim world, Makkah and Madinah. Moreover, the Kingdom floats on a sea of oil, with proven reserves exceeding 260 billion barrels, constituting over 25% of all known oil reserves in the world. It has this huge accumulation of hydrocarbons, and this translates into oil and gas Production. The revenues from these oil products have transformed a somnolent web of nomadic herdsmen leading their camels from oasis to oasis into a network of 4brightly lit, modern, bustling cities connected by broad highways to oil refineries, pipeline pump stations, and petrochemical complexes. Saudi Arabia’s foreign policy is made up of two components, internal and external, The Saudi political system, geographic location, and population, and its economic and military capabilities determine the internal instruments. Saudi relations with several major powers, including the United States and European countries, as well as its relations with countries of other regions, including those of sub-Saharan Africa, determine the external instruments, The Arab-Israeli conflict also has been a major factor in shaping initial Saudi Arabian foreign policy. King Faisal’s rule marked the zenith of Saudi foreign policy, when oil was used as a weapon in the 1973 war between the Arabs and Israel. Arab states, led by Saudi Arabia, cut back oil production by 25% in November, 1973, and then waived an additional 5% cut in December as a “gesture” toward Japan and the European Economic Community in response to their balanced statements. The Arab embargo against the United States, Holland, Portugal, South Africa, and Rhodesia was declared mainly as a political response. These countries either practiced apartheid, like South Aftica and Rhodesia, or were pro-Israel or colonialist-imperialist. The cutback reached four million barrels per day (bpd) in 1973 (Fofanah 1991). In the 1960s, the Kingdom was pumping close to eight million bpd, far beyond its financial needs, but more than enough to meet the American demand. Under Faisal’s rule, relations between Riyadh and Washington, DC, continued to improve despite the oil embargo, especially in light of Egyptian President Nasser’s continued threats and desire to accommodate Soviet expansion in the region. The Kingdom tried 42to shore up pan-Arabism and pan-Islamic policies as an alternative to Nasser’s radicalism. Faisal’s pan-Istamic policy was a master stroke that served two purposes it strengthened the Kingdom’s standing in the Islamic world and it bolstered the royal family’s political legitimacy at home. Faisal started his policy and strengthened his efforts in pan-Islamism as soon as he succeeded to the throne in 1964, following a series of state visits to Muslim countries supported by Saudi financial aid around the world (Wilson and Graham 1994). Saudi development and cultural assistance was used to help Muslim states, including those in sub-Saharan Africa. This aid brought the countries together in the first Islamic summit meeting in Rabat, Morocco, where the Organization of Islamic Conference (OIC) was established in 1969. Saudi diplomacy accomplished its objectives through bilateral and multilateral foreign aid institutions such as the Saudi Development Fund (SFD), the Arab Bank for Economic Development in Africa (BADEA), and the Organization of Petroleum-Exporting Countries (OPEC) Fund for International Development. Also, through such Islamic institutions as the OIC, IDB, and MWL, Saudi financial aid was used to wean Egypt from the Soviet embrace when President Anwar Sadat, during his anti-Soviet policy in Africa, estimated that the Soviets had weapons worth USS12 billion on his western border. Also, Saudi aid was used to end the first round of the Lebanese civil war and to ease tensions between Syria and Jordan (Israeli 1979:39-48). Saudi Arabian Foreign Policy The main elements of Saudi foreign policy as identified by Saleem Khan (1974:79-90) are history, location, oil, Islam, and the monarchy. Khan mentions that BSaudi Arabia has undergone three distinct periods of development. The first period was from 1953 to 1956, the second from 1957 to 1967, including the conflict between Saudi Arabia and Egypt during King Faisal’s era; and the third from the June 1967 war onward, when Nasser was defeated in the conflict between Israel and the Arab countries. Saudi foreign policy toward African states is divided by Nyang (1982) into the same three time periods. During the first period, the Al-Sa'ud House focused mainly on internal problems. After the death of King Abdul-Aziz, Saudi authorities began to cement relations with Western countries such as the United States and Great Britain to ensure the security of the country as well as to build powerful alliances. Saudi Arabia had no formal relationship with most of the Communist countries, including the former Soviet Union. Saudi Arabia did not want to interfere with colonial African states because it felt it was unwise to take a hostile attitude toward European states while they were still in the stage of building up the country. The second period (1957-1967) was shaped by conflicts with President Gamal Nasser of Egypt. The conflict between King Faisal (pro-Islam) and President Nasser (pro-pan-Arabism) was heating up. Nasser started a propaganda machine of pan- Arabism by publishing a book, Philosophy of the Revolution. The main themes of this book are Islam, pan-Arabism, and Aftica. King Faisal tried to bring African leaders to his side. In 1960, the Saudi ruling family invited the Ethiopian monarch, Emperor Haile Selassie, for a visit. According to Nyang, Selassie was given the red-carpet treatment. This was considered a dramatic change in the policy of the Saudi government from the policies of the late King Abdul-Aziz.The third period comes following the June 1967 War between the Arabs and Israel. After Egypt’s Nasser was defeated, Saudi Arabia began to emerge as the leader of the Arab and Islamic countries (Nyang 1982, 4). Saudi foreign policy toward Africa also can be highlighted into three iterrelated orientations: a pro-West, anti-Communist orientation; an anti-Israeli stance; and a stress on conservative, neither secular nor fundamentalist. Islamic values have been used as a legitimizing ideology for the Kingdom. Saudi Arabia foreign policy toward the West has been shaped by oil. The rise in oil prices has given greater significance to Saudi Arabia. Saudi Arabia’s relationship is inspired by Islamic solidarity and an apprehension regarding the expansion and threat of Communism, especially in countries across the Red Sea, such as Ethiopia. Saudi Arabia uses its development and cultural assistance power to discourage any formal relationship between African states and Israel. Thus, African states shifted their attention to Saudi Arabia because it became an important state, South Africa, Nigeria, Ethiopia, and Egypt are key actors in Africa international relations. Saudi Arabia became a “core” country in African international relations when Saudi leaders convinced some East African states, Egypt, Sudan, Somalia, and Djibouti, to move from the Soviet camp toward the Western camp or into Saudi Arabia's orbit (Kenneth 1982:42-104). Furthermore, Saudi diplomacy stressed the issue of decolonizing and liberating African states in the UN, Arab League, and OIC conferences. Saudi Arabia’s message was heard and delivered to SSACs by increasing the number of Saudi embassies and cultural and consular offices, MWL, and religious attaché offices. Saudi Arabian foreign policy has been accomplished politically through the spread of Islam, and 45economically through foreign aid, reaching $93 billion between 1973 and 1990, or roughly 7% of the country’s GNP (Alfarsy 1992). Following the Gulf Crisis in 1990- 1992, Saudi development assistance has been maintained at almost the same level but was reduced dramatically to those countries that supported Iraq, such as Jordan and Yemen. Yet Al-Sugair (1993) notes that the Gulf Crisis was a crucial turning point in the political relationships with the countries that supported Iraq, such as Jordan and Yemen. He states that if political motives played a role in Saudi assistance to these countries, then Saudi Arabia made a poor investment for its foreign aid. Saudi Arabia needs a more sophisticated policy for its foreign assistance (Al-Sugair 1993:241). Brief Description of Saudi Arabia Geography Saudi Arabia, with an area of approximately 870,000 square miles, occupies the largest part of the Arabian Peninsula, which is about four-fifths of the entire peninsula. Ina land of shifting sand dunes and unmarked borders, there are varying estimates of its size. Reference books have different size estimates; however, one can say that Saudi Arabia is one-third the size of the continental United States or the same size, roughly, as all of Western Europe. Saudi Arabia lies at the crossroads of three continents—Europe, Asia, and Africa. It extends from the Red Sea on the west, which separates Saudi Arabia from the SSACs, to the Arabian Gulf on the east. The Arabians call this body of water the “Arabian Gulf,” while Iranians call it the “Persian Gulf,” and outsiders who prefer to offend no one call it simply, “The Gulf.” To the north, Saudi Arabia borders on Jordan, Iraq, and Kuwait and to the south, the Yemen Arab Republic and the Sultanate of Oman. In addition, in the south, there is the Rubal-Khali (the Empty Quarter, because it is uninhabitable), which extends over 250,000 square miles—the largest sand desert in the world. To the east lies the United Arab Emirates, Qatar, and the island state of Bahrain. Saudi Arabia is the largest country in the world without a river. Rainfall is erratic, averaging two to four inches a year, except in the west and southwest. In the past, with a smaller population, deep wells provided drinking water for the country, but today Saudi Arabia invests more money in desalinating sea water than any other country in the world. There are 14 provinces in the Kingdom, including Riyadh, the capital city, and Makkah Al-Mukarramah, where the holy site of the Ka’bah is located, and Madinah ‘Al-Munawarah, where are located the burial places of Prophet Muhammad {Peace Be Upon Him} and many of his companions. The eastem region is known for its massive oil reserves, the largest in the world. History Man has settled the land now known as Saudi Arabia since the remotest period of recorded history. It is located on ancient trade routes, and the ancestors of today’s population were in contact with many varied civilizations, including those of Mesopotamia, Egypt, Greece, Rome, Byzantium, and China, Muhammad, the son of Abdullah, son of Abdul-Mutalib {Peace Be Upon Him}, was born in the Christian era (CE) 570 in Makkah, Arabia (see Table 1). He was the last and final messenger of the One Almighty God (Allah) of Abraham, Moses, David, Soloman, and Jesus {Peace Be Upon Them All}. The message of worshipping only one God, Who is never in His Creation, would spread around the world and eventually embrace one-fifth of the human race. The Holy Qur'an (‘Recitation’) was revealed by Almighty Allah to 47Prophet Muhammad {Peace Be Upon Him} through Archangel Jibreel (Gabriel), in the western Arabian caravan city of Makkah beginning in 610 CE. The history of modern Saudi Arabia begins with King Abdul-Aziz Ibn Salud, who united the tribes of the Arabian Peninsula under his rule during the 1920s and 1930s, Since the discovery of oil in 1938, the country has greatly increased its participation in world affairs. Table 1 Major Dates in Islamic History Date Event 570 CE Birth of Prophet Muhammad. 609 First verses of the Qur’an revealed. African migration. 622 Prophet's migration from Makkah to Madinah (hijrah), Beginning of the Islamic calendar. 632 Death of the Prophet. 632-661 ‘The “rightly guided” caliphs rule—Abu Bakr, Umar, Uthman, and Ali. oT Battle of Siffin begins the cleavage of Islam into 2 branches: Sunni and Shia. 661-750 ‘Umayyads rule in Damascus. 750-1258 Abbasids rule in Baghdad. 756-1031 Umayyads rule in Spain. 909-1171 Fatimids rule in Cairo. 1037-1300 Seljugs rule in Anatolia. 1171-1371 ‘Ayyubids rule in Egypt. 1187 Ayyubid leader, Salah Al-Deen, conquers Jerusalem. 1252-1517 ‘Mamluks rule in Egypt and Syria. 1258, Mongols conquer Baghdad. 1299-1924 ‘Ottomans rule in Byzantium. 1369-1500 Timurids rule in Samargand. 1453 Turkish conquest of Constantinople. 1492 Fall of Granada in Spain (last Arab dynasty). 1501-1736 Safavids rule in Persia 1526-1857 Moguls rule in India. ‘Source: Islam: A Global Civilization. Prepared by the Islamic Affairs Department, Embassy of Saudi Arabia, Washington, DC, 2000. 48Population The Saudi government released in 1992 the results of its third official census. ‘The Kingdom’s population was estimated at 16,929,000 in 1990. Estimates of the population holding Saudi citizenship are about 12,300,000, of whom about 10% are Bedouin. The government reported that the Kingdom’s population is growing at an annual rate of between 3.5% and 3.8%. At that rate, the population will reach 40 million by the year 2020, even though the Kingdom’s infant mortality rate is among the highest in the region. Most of the Saudi population is young, under the age of 14. Saudi Arabians share a common religion—Islam—and a common language—Arabic (Saudi Arabia 11(3), 1994). The Human Development Report (UNDP 1999) published by the UN shows the Saudi population increased from 7.3 million in 1975 to 19.5 million in 1997. The same figures stated that in 1997, 84.1% of the population lived in urban areas and only 2.8% are aged 65 and above. The fact that Saudi Arabia hhas never been under colonial domination has contributed to the political and social stability of the country. Each province in the country has its own culture and can trace its roots, sometimes as far back as 5,000 BCE, The basic structure of Saudi society is a that of a hierarchy of tribal families—noble and commoner—where some Saudi families trace their lineage to Prophet Muhammad Peace Be Upon Him}. It is common knowledge that Prophet Muhammad {Peace Be Upon Him} was a descendent of Prophet Abraham {Peace Be Upon Him} through his first son, Ishmael (Ismail). Since the discovery of oil in 1938, the number of foreign residents in the Kingdom has risen dramatically. In 1990, an estimated 5.3 million foreigners were working in Saudi Arabia, mostly in the private sector. The main reason for the 49increasing number of foreigners working in Saudi Arabia is the huge amount of money the government has spent on development. Saudis have become less competitive with foreigners in the private sector because they do not have the skills that foreigners have ‘Douglas and Wilson 1994). Saudi Arabia’s population is becoming increasingly urban, especially in the capital, Riyadh, and in the city of Jiddah, in the western province, because the government put more emphasis on developing major cities. Urban areas are given more attention by the government, especially in social developmental infrastructure projects. Therefore, the Saudi population migrated from rural to urban areas seeking employment, good health services, and better education for their families (4/-Riyadh 11968—38" year Saturday 3/31/2001). The UNDP report of 1999 predicted that the ‘Saudi urban population, as a percentage of the total, will increase from 84.1% in 1997 to 89.7% by the year 2015. Many foreigners working in Saudi Arabia are also stationed in urban areas since most of the projects are either in the capital city, the westem province, or the eastern province, including the cities of Dhahran, Dammam, and Al-Khobar, where the big oil companies and refineries are located. In the late 1980s to mid-1990s, when Saudi Arabian revenues dropped because of lower oil prices (down to around $8 a barrel), the government rethought its policy on foreign workers. The public sector as well as the private sector replaced many North American and European expatriate workers with cheaper Asian labor and workers from other nationalt , including Arabs. 50Government and Law Saudi Arabia is the only major nation in the world where the constitution is based on sacred Scripture—The Holy Qur'an. The Shar‘iah, the Islamic code of law, is also based on The Holy Qur‘an. The Sunnah (the sayings and actions of Prophet Muhammad {Peace Be Upon Him}) is the foundation of the legal system in Saudi Arabia. The Holy Qur'an is considered the constitution of the country and provides ethical values and guidance. On the one hand, Saudi Arabia can be thought of as an Islamic state. The King and the Council of Ministers, within the framework of Islamic law, exercise executive and legislative authority (Figure 1). The Kingdom's ministers and government agencies are ultimately responsible to the King. On the other hand, Saudi Arabia is a monarchy, and its political system is not based on that of any colonial power, but rather was devised by King Abdul-Aziz Ibn Sa'ud when he united the tribes of the Arabian Peninsula under his rule. Yet the political structure is unique, as the King’s power appears absolute as long as his rule adheres to the Shari'ah, The Council of Ministers was established in 1954. Article 8 of the Constitution of the Council of Ministers specifies that two-thirds of the members constitute a quorum for a meeting and that decisions voted on must be by a majority of members. The Council of Ministers is the Kingdom’s most powerful political institution in both legislation and implementation of laws. It also formulates grant policies internally and externally. However, policies are not final until approved by the King, who is the Council president. The Council meets weekly to discuss the agenda, and decisions usually are announced publicly unless the president decides otherwise. Since the era of King Faisal, the deputy president of the Council can SIpreside over Council meetings, regulate debate, conduct voting, announce the Council’s de ions, and adjourn meetings (Alfarsy 1992). At the present time, the second deputy may represent the King at the Council’s weekly meetings. There are two groups in the Kingdom that constitute the primary power base. These decision-makers are called “ahi al-hallwa al-aqd’ or the “people who bind and loose.” According to Dahlan (1990: 15:21), one group consists of the Al-Sa'ud family, the Ulema, and chief justice and judges of the courts, and the other group consists of members of the Council of Ministers and the Consultative Council members. The Cabinet consists of the original fourteen ministries: Defense, Foreign Affairs, Labor and Social Affairs, Interior, Education, Communication, Agriculture, Financial and National Economy, Petroleum and Mineral Resources, Health, Commerce, Pilgrimage and Endowments, Justice, and Information. In October 1975, the Cabinet established six new ministries: Public Works and Housing; Municipal and Rural Affairs; Higher Education; Industry and Electricity; Telegraph, Post and Telephone; and Planning. With the Minister of State with Portfolio, the number of ministers increased to 21. Then, in 1988, a Royal Decree added three new members to the Council: the Saudi Port Authority, the Control Auditing Bureau, and the Investigation and Control Board, to make a total of 26 ministers (Alfarsy 1992). 52‘Minister of State and President of Port Authority Minister of State and President of Controller Bureau. Ministers without Portfolio (Royal Advisors) inser 5 “ “e os Industry’ | Municipal and Higher Electricity | Rural AMairs Education 5 Minister Minister Minister aoe of of of [Aviation i Health restate | see | ee 7 Miniser Minister e Pilgrimage Public Works/ § | tormaton Planning im aoe 2 Religious Trusts. = | —Minser Winiser teegenty | (bination aoe Ss ‘Telecommu- board handles Candies tate ae ——— a offenses) Economy disputes) miner | Miniser | Mier) Migr Agriculture! ions | PetToleum/Mineral | —Labor/Social ricatre! | Communications | Petroleum lens Local Saudi Arabia General Agency g | Adminisration | Monetary Agency | Saudi Aisine for (Emirates) | (Cental Bank) Desalinization i industrial ‘Saudi Arabia General Railroad Petromin for F Onpnizatin for | Research and Z |__aeeney Social Insurance velopment 3 ‘Local © | Administration “a (Municipalities) | _Universiies Figure 1. Council of Ministries and Public Corporations Source: Aifarsy 1992. 53Social Structure of Saudi Arabia Culture Culture has always been difficult to define, since it is complex and involves a great number of variables. In some cases, culture may be literally defined as a particular group behavior integrating certain characteristics such as language, ideas, beliefs, customs, or even habits. But this definition does not describe culture thoroughly, because it conceptualizes culture and behavior as the same function. A more accurate definition of culture must take into account the importance of the more abstract ideas and symbols it contains, pay closer attention to the dimension of time in cultural development, and see values as the core element of a culture. There are a number of contributing factors to culture, such as religion, education, politics, economics, family, and history. Religion is the most important source in each culture, so in this work, cultural policies mainly mean religious. Saudi Arabia is not an easy country to know and understand because the Saudis are a very private people and are protective of their cultural traditions. This protectiveness contributes to the misinformation and dearth of accurate information available outside the Kingdom about the Kingdom. The government used to not allow tourists and curiosity seekers into the country, which created cultural misconceptions about Saudi Arabia. Foreigners had to be engaged in some specific task, e.g, work, in order to enter the country. However, the new force of globalization and conditions of the World Trade Organization (WTO) have led the Saudi government to change this policy and to begin accepting visitors into the country as tourists. 34In Saudi Arabia, Islam is both the law and the religion. Islamic religious law (Shar'iah) governs the society, and the govemment's function is to enforce the Shar‘iah. Saudi Arabia never attracted the intrusion of colonial powers; perhaps it is because of its climate or the Bedouin society, but whatever the reason, the country has never been under another cultural influence. The Kingdom of Saudi Arabia has successfully preserved and strengthened its cultural heritage while at the same time transforming and modernizing itself. The General Presidency of Youth Welfare and the Department of Museums and Antiquities are the main government agencies that protect and strengthen understanding of the nation’s culture. The King Faisal Foundation also promotes Arab and Islamic culture both within the country and abroad. The Riyadh-based organization awards its annual King Faisal Intemational Prize to individuals who have promoted literature. Saudi Arabia's dress is that of the past and reflects the challenging environment, faith, and values of its people. The practicality of loose, flowing garments in hot, wind-swept climates is reinforced by the Islamic ideal Arabic calligraphy dates back approximately 1,400 years to the first century of Islam. Historically, the primary subject matter for calligraphy has been 7he Holy Qur'an. Characterized as the quintessential Islamic art form, calligraphy is a revered art in Saudi Arabia. Dates are reckoned from the year of Prophet Muhammad's {Peace Be Upon Him} Hijrah (emigration) from Makkah to Madinah (622 CE). The Islamic method of dating is AH (Anno Hegirae); therefore, 2000 CE roughly 35corresponds to 1421 AH (Table 2). Friday is the Islamic holy day, and the workweek begins on Saturday. The Islamic calendar used in Saudi Arabia is based on the lunar year rather than the solar year, as is the case with the Gregorian calendar. A lunar month is the time between two successive new moons. Although containing 12 months, the lunar year is 11 days shorter than the solar year; hence, the holy days, such as Ramadan— the fasting month—and the Hajj pilgrimage gradually shift from one season to another. Table 2 id Ch Calens AH 1390 Beganon March 9, 1970 CE AH 1400 Beganon November 21,1979 CE AH 1410 Beganon August 4, 1989 cE AH 1420 Beganon April 17, 1999 cE AH 1421 Beganon April 6, 2000 CE AH 1422 Began on March 26, 2001 cE ‘AH = Anno Hejirae, CE = Common Era Religion The religion of Islam e: Is the complete acceptance of and obedience to the teachings of Allah (God), which He revealed to His prophet, Muhammad {Peace Be Upon Him}. Muslims believe in one, unique, incomparable God, Who has no son and no partner. No one has the right to be worshipped but He alone. Muslims believe that God is the true God and that every other deity is false. No one shares His divinity or His attributes. In The Holy Qur‘an, Allah describes Himself: 56Say, “He is God, the One. God, to Whom the creatures turn for their needs. He begets not, nor was He begotten, and there is none like Him” (Qur ‘an 112:1-4) Nearly every religion of the world has been named after its founder or after the community or nation in which it was born. For instance, Christianity takes its name from its prophet, Jesus Christ, Buddhism from its founder, Gautama Buddha, and Judaism, the religion of the Jewish people, from the name of the tribe of Judah (or the country of Judea) where it originated. Islam enjoys the unique distinction of having no such association with a particular person, people, or country. Nor is it the product of any human mind. It is a universal religion which, in fact, any race, community, country, group, or individual can join. Islam is an Arabic word connoting submission, surrender, and obedience (Mawduddi 1985). No one has the right to be invoked, supplicated, prayed to, or shown any act of worship, but God alone. Muslims believe that Jesus was one of the greatest of God’s messengers to mankind. Muslims respect Jesus, but they do not believe that he is God, or that he is the son of God. Even Jesus himself rejected this. The Holy Qur‘an also confirms his virgin birth. Jesus was born miraculously by the command of God, ‘Who had brought Adam into being without a father (Ibrahim 1997), Islam is the cornerstone of Saudi Arabia. Islamic law (Shari‘ah) is the constitution which governs society in Saudi Arabia. Saudi Arabia occupies a special place in the Islamic world, for it is the heartland of Islam. It is toward the sacred Ka'bah in Makkah that Muslims turn devoutly in prayer five times a day. The hours of prayer vary with the seasons, and all prayers are announced in the Saudi media, eg. television and radio. All business, commerce, and government activity is s7postponed until prayer is finished. In Saudi Arabia, there is no excuse for everyone not to go to the mosque, especially those in the street, since all Saudi citizens are Muslim. The government of Saudi Arabia has several agencies controlled by the Ministry of Islamic Affairs that enforce the practices of the religion. Islam has five pillars that all believers must follow. These five pillars are: /) the testimony of faith (Shahadah), 2) prayer (Salah), 3) giving Zakat, 4) fasting in the month of Ramadan (Siyam Ramadan), and 5) pilgrimage (Hajj) to Makkah. Faith The testimony of faith is saying with conviction, “There is no god to worship except Allah; Muhammad is the Messenger of God.” The testimony of faith is the most important pillar of Islam. It must be understood that Allah is Unique in His Oneness and as such cannot ever exist in his Creation. Prayer Muslims pray five times each day facing the holy site of the Ka'bah, Bilal, an African immigrant, was one of Muhammad’s {Peace Be Upon Him} companions who was charged to call the people to prayers. Prayers are performed at dawn, noon, mid-afternoon, sunset, and night. Muslims may pray almost anywhere they are located, such as in fields, offices, factories, or schools. Zakat One of the most important principles of Islam is that all things belong to Allah and that wealth is therefore held by human beings in trust. The original meaning of Zakat is 58both “purification” and “growth.” Zakat prescribes payment of a fixed proportion of a Muslim’s wealth for the welfare of the entire community in general and for the poor in particular. ‘Saudi citizens in general, and the Saudi wealthy in particular, send their Zakat to the poor African people. Saudi religious scholars encourage both the government and citizens to donate generously to poor Afticans to eliminate poverty. Saudi citizens have built schools, clinics, and mosques and dug wells in Africa as part of their Zakat and voluntary alms and charity. ‘This became very obvious following incidents of natural disaster faced by many African countries. Fasting Muslims fast during the month of Ramadan, the ninth month of the Muslim calendar. During Ramadan Muslims abstain daily from food and drink from dawn to sunset. Pilgrimage The fifth pillar of Islam is performing Hajj (pilgrimage) to Makkah. The Hajj is an obligation to be observed at least once in a lifetime for those who are physically and financially able to perform it. The Hajj is a gathering of millions of Muslims from around the globe and is a good opportunity for Muslims from around the world to get to know about and lear from each other. 39Pilgrims wear special, simple clothes, worship the one God, and have one objective, to unite as one nation “Ummah.” The performance of Hajj strips away distinctions of class and race so that all stand equal before God (Ibrahim 1997). Islam has proudly affected the history and development of the Arabian Peninsula and the Kingdom of Saudi Arabia in particular. Saudi Arabia is committed to preserving the Islamic tradition in all areas of government and society. Islam guides not only the lives of the people but also the policies and functions of the government. It is the leader in the pursuit of worldwide Islamic solidarity and hosts the MWL and the OIC, institutions dedicated to preserving the Islamic society. The Kingdom has been responsive to the needs of the Islamic world. Saudi Arabian leaders work tirelessly to promote peace and stability in Muslim and Arab countries throughout the world. Caring for the holy cities of Makkab, the birthplace of Islam and Prophet Muhammad {Peace Be Upon Him}, and Madinah, the Prophet's {Peace Be Upon Him} burial place, is a sacred trust exercised on behalf of all Muslims. Recognizing the unique and historical traditions these holy sites represent, King Fahd Bin Abdul-Aziz adopted the official title of “Custodian of the Two Holy Mosques” as ‘an expression of his deep sense of responsibility toward Islam. Its superb maintenance and expansion of the holy sites, enabling ever-greater numbers of Muslim pilgrims to perform the Hajj, demonstrate Saudi Arabia’s dedication to Islam. The vast financial and human resources Saudi Arabia has committed to preserving the Hajj also reflects the dedication of the leadership and citizens of the Kingdom in the service of Islam and the holy sites by preserving them as a haven of peace for all Muslims.Saudi Family and Social Life In Saudi Arabia, the family is the most important facet of every individual’s life, where the family is considered the center of the society. A person usually is known by his or her family name. Islamic laws of personal status remain in force in Saudi Arabia. Men use their father’s name to identify themselves; for instance, Khaled Bin (son of) Muhammad Alghoraiyr (of the Alghoraiyr family). The famil identity is tied to the father, and the children are considered to belong to him rather than to their mother. As part of Islam, when women get married, they continue to carry their father’s and their birth family name; they do not take the name of the husband, as in most Western nations. Not too many years ago, several generations of a family unit lived together in ‘one large house or compound or near one another; but that is no longer generally true. ‘As the Kingdom’s economy changes, Saudi families like the privacy of their own home. They no longer prefer to share yards or living rooms with one another. In a typical Saudi family, the father has the obligation to provide for the expenses of the home. He also has the full responsibility of his children; he has to care for them and encourage their education. In addition, the Saudi father tries to teach his children to be Fespectful of family members and to continue family traditions. On the other side, the mother has the full responsibility for what happens inside the home. The mother, or wife, manages the house intemally and externally and takes care of the family ‘members. In Islam, one learns that the gateway to heaven lies at the feet of the mother because of her vital role in teaching and communicating the values of the family to the children, 61Role of Women in Saudi Arabia Throughout history, women have been an important factor in the success and continuation of Islam. Islam very strongly states that the primary role of the woman is within the family, and at the same time, she is given a great deal of protection, social, financial, etc. The roles of the woman as mother, sister, daughter, and first teacher are highly valued. Saudi Arabia has had five kings since the founding of the country in 1932; but never have their wives taken a role in the political activities of the country. Saudi Arabian women are trained from childhood to be wives and mothers, to support their families, and to focus their attention and activities on and in their homes. Saudi Arabian women are very important to life and the society, and they have the same authority as the men in the culture. In fact, they may have even more power in solving problems than what is thought by the outside world. The stability and happiness of the family depends on how the women handle their roles in the family. Women are the peacemakers. This recognition of the conciliatory and complementary role of women is the major reason that family life is so stable in Islamic societies. Islamic societies have the lowest rates of divorce anywhere in the world. As a result of Islam, Saudi Arabian women are more loyal to their husbands and families. Most agree that culture is derived from elements of religion, economics, education, etc., but sometimes culture does not go hand-in-hand with religion. Culture, paradoxically, embodies both positive and negative aspects of life. In one way, people should distinguish between religion and culture. When culture conforms 62to religion, it should be respected. If not, the culture should be re-evaluated and reconsidered as a deciding factor. Education for Saudi women was re-evaluated and then began in 1959; before then, ignorance and imposition of traditional ways was responsible for prohibiting ‘women from attending school. Some Saudi families (tribes) thought that establishing schools for women would destroy the family and hurt the status of women. They thought that formal education would make women want to avoid household responsibilities and that they would become shameless. However, by the end of the 1980s, female students at all levels of schooling had increased dramatically. In fact, the number of female university graduates continues to increase at a faster rate than the number of male graduates, However, this increasingly puts more pressure on the government to employ women and allow them to join the workforce. The issue of women’s employment becomes more pressing as the number of female university graduates continues to increase. Women can study whatever they wish in school. In Saudi Arabia, women can become teachers, doctors, bankers, or can even work in factories and certain laboratories under certain circumstances. However, tradition still plays a major role in restricting and protecting women in light of the public interest. For instance, tradition discourages women from working as waitresses, plumbers, bus drivers, gas station attendants, and in other, similar jobs. Tradition says that these lower-status jobs should not be open to the “gentler” sex. However, there is much progress in women’s employment in Saudi Arabia, especially in the technical and advanced “public” areas. 63Conclusion Saudi Arabia has changed rapidly in recent decades. Increases in oil revenues since 1970 have contributed to the country’s growing economy and helped change some of its traditions. Systematic planning for the economic and social development of the Kingdom began in 1970 with the first five-year plan. The five-year plans are master plans for economic and social development that take into consideration the needs of the country over a period of time. Saudi Arabia has taken advantage of a foreign work force. The number of guest (foreign) workers in the mid-1980s was estimated at more than one-fifth of the total population. The goal of Saudi local development plans is to increase the number of Saudis in the workforce from 40% to 51% (Saudi Arabia: A Kingdom in Transition, 1993). Bringing in numerous outsiders was not necessarily a bad move, but today the Saudis are learning to be more self-reliant. With the completion of the major industrial projects, the number of guest workers is declining and Saudization of both the private and public sectors is noticeable. Islam very considerably influences Saudi foreign policy. Solidarity with other Muslim countries around the world is an important objective. Countries such as those south of the Sahara Desert have received special consideration in terms of foreign aid because ofa religious affinity. Islam was the principle motivation for Saudi Arabia’s staunch anti-Communist position throughout the Cold War era. For example, Saudi Arabia closed the Saudi legation in Moscow in 1968 and declined to resume diplomatic ties with the Soviet Union because of Moscow’s attitude toward Muslims.Following the dissolution of the Soviet Union at the end of 1991, however, Riyadh established relations with most of the 15 separate new republics. From an Islamic perspective, it is permi ible to maintain diplomatic relations with non-Muslim states that are not hospitable to Islam. Most ties between Saudi Arabia and non-Arab and non-Muslim countries are of a commercial nature. This policy decision does not limit the nature of Saudi Arabia's relationship with African countries, even if the president of the foreign nation is a catholic, as in the case of President Leopold Senghor of Senegal, or in the case of President Abdu Diouf, a Muslim married to a catholic woman. 65CHAPTER III. POVERTY IN SUB-SAHARAN AFRICAN COUNTRIES Introduction For the past five decades, poverty has been the main cause of death in sub- Saharan African countries. Many SSACs are trying to make economic progress for their people’s benefit. The World Bank Report, World Development Report 2000/2001, in assessing poverty, estimated that of the world's six billion people, 2.8 billion, almost half, live on less than two dollars a day, and 1.2 billion, a fifth, live on less than a dollar a day. Most of these poor people are located in South Asia and sub- Saharan Africa (Table 3). Population explosion and environmental deterioration have compounded Africa’s problems. Africa’s population is estimated to have grown by cover 140% between 1960 and 1992 and is expected to grow by another 27% and reach about 710 million by the year 2000 (Mengisteab 1996). Table 3 Pe ion Livin ‘Than Sia Day, 1998 (12 billion) ‘Country Area Percentage Middle East and North Africa 0.05 Europe and Central Asia 2.00 Latin America and the Caribbean 6.50 East Asia and Pacific 23.20 Sub-Saharan Africa 24.30 South Asia 43.50 Source: World Bank Report 2000. Statistics from the same report show that the number of African poor people living on less than $1 a day has increased, from 217.2 million in 1987 to 290.9 million in 1998, 66Most studies on social economic policies, whether domestic or foreign, presuppose that there are only two types of system in existence. They always have a tendency to present active, opposing systems. One is a very socially oriented structure, often referred to as Marxism, based on the teachings of Karl Marx. The other is a capitalistic type of structure, usually defended under the title of a “free- enterprise system.” Yet, when dealing with Muslim countries, there must definitely be taken into consideration the Islamic social system, which at various points in time has very successfully ruled major portions of the known world. When we look to early Spain (Andalusia), it was under the Islamic system for over 700 years. Or when we consider the Ottoman (Turkish) Empire, Islam ruled for over 400 years. Then there were the Fatimids of Egypt and the Abbassid dynasties, two of the most successful systems of rule and government in world history. There are numerous studies about the poor and poverty in many parts of the world, However, the study by Narayam Deepa (August 2000), Voices of the Poor, Crying Out for Change, is considered the most comprehensive study. This book is the second in a three-part series entitled Voices of the Poor, based on realities together with the views, experiences, and aspirations of more than 60,000 poor men and women from 60 countries. The work was conducted as background for the World Development Report 2000/2001 on poverty and development. The work consists of two parts: the first is Can Anyone Hear Us? which brings together the voices of over 40,000 poor people from 50 countries from studies conducted in the 1990s; and the second is a new comparative study, Crying Out for Change, which brings together the 67voices of over 20,000 poor men and women from comparative fieldwork conducted in 1999 in 23 countries. The study shows that poor people are active agents in their lives but are powerless to influence the social and economic factors that determine their well-being (Deepa 2000). While the general effects of poverty in developing countries can be glimpsed through the Western media’s often paternalistic portrayal of the Third World, its underlying causes lie in a deeper understanding of the world's Capitalist system. The writings of Immanuel Wallerstein and Samir Amin have contributed greatly to our understanding of how, in the late 20" century, capital accumulation in industrial societies contributed to and perpetuated a "vicious cycle of poverty" in sub-Saharan African countries. They expand on early Marxist theories that explain how the political and economic superstructure created by Capitalism contributes to the alienation of socie ies from their pre-Capitalist modes of production. Underdeveloped countries share an opposition to the colonization and imperialism experienced by foreign countries in the past. Imperialism is domination or control by one country or group of people of another, either through economic and technological power or through political power. The Third World is still subject to the new Imperialism. Ghana’s first president, Kwame Nkrumah, in his book The Last Stage of Imperialism (1965), about neo-colonialism, characterized this as imperialism without a colony. The essence of neo-colonialism is that the state that is subject to it is, in theory, independent and has all the outward trappings of intemational sovereignty; in reality, however, its economic system, and thus its political policies, 68are directed from the outside. This will remain the same until the structure of the whole system changes. Definition of Poverty Poverty is not easy to define. Some people think that poverty is simply the lack of food; yet poverty exists in countries where there is a surplus of food. Others think that poverty exists only where people have low incomes; yet we find poverty in some countries where the income level is considered high. We also find poverty in rich, developed countries such as the oil-rich Arab states of the Persian Gulf and Western countries such as the United States. What matters in these countries is not the wealth per capita but the distribution of income. With dominance over the means of production (in this case, oil), the elites of these countries have a disproportionate share of the national wealth, whereas most of the general population lives below the poverty line. This uneven distribution of income is very common in SACs; this is primarily because Third World governments focus only on the capital or major cities of their countries, where the elites live. This may be why we find poor people in SSACs constantly migrating from the villages to the urban areas. Serageldin’s (1997) Voices of the Poor suggests that people must listen to the poor. The poor are the true “poverty experts,” and officials would benefit from hearing these “poor” voices. ‘What is poverty then? Poverty is not simply low income or a lack of housing, clothing, or food; poverty is more than that. It is a “grinding fight against oppression, hunger, sickness, and death” (International Development Association 1995:7). The World Development Report, Poverty (1990) defines poverty as the inability to attain a minimal standard of living. Thus, eliminating poverty involves notonly increasing income by some percentage each year, but also the attainment of a good standard of living in general. This can be measured by looking at life expectancy, literacy, health care, and access to social services. ‘Nadine Gordimer, who won the Nobel Prize for literature in 1991, states that the faces of poverty are the sum of all our hungers. She discusses and defines poverty since Adam and Eve were cast out of the Garden of Eden. Gordimer argues that poverty is not as is immediately conceived, a lack of food, but goes beyond that. Poverty is the lack of access to public services, such as health, housing, and clean drinking water. In her country, South Aftica, civil war, discrimination, and apartheid are other kinds of poverty which are not counted in the international arena (Choices 1996). The United Nations General Assembly declared 1996 the “Intemational Year for the Eradication of Poverty.” The UN Development Program named poverty eradication as the organization's “job number one.” Choices (October 1996) identifies 61 ways that people look at poverty, having talked to people around the globe including Hillary Rodham Clinton, former first lady of the United States. Poverty was variously described as hunger, loneliness, having nowhere to go when the day is over, deprivation, discrimination, abuse, and illiteracy; poverty means that God forgives their thefts; and poverty means that their children are crying but there is nothing to feed them (Choices, 1996). The World Development Report (24-28) estimates that in 1986 more than one billion people in the developing world lived in absolute poverty. However, measuring the standard of living is quite different from country to country, and the basic 70necessities vary from society to society. For example, in some countries, air conditioning is considered a luxury, but in others it is considered a necessity. The poverty line was described in the World Development Report as between US$275 and US$370 per person per year. If a person’s income is close to US$275, that person is considered to be on the lower end of the scale of poverty. Nature of Challenges Facing African Countries While poverty is the main problem facing SSACs, there are a number of factors that perpetuate it. After defining poverty, this section will examine the economic dependence of SSACS on industrialized countries. Their economic, political, and social situations are worsening, This section also will examine the crises of international debt and foreign aid facing many Third World countries and especially African countries, which reveal how the more-developed countries exploit this weakness. To better understand SSACs’ economic, political, and social crises, two views will be discussed briefly. The first is the view of Wallerstein and Amin. Amin’s (1976) reappraisal of the Marxist analysis is very helpful in placing the problems of poverty and development in a historical perspective. Amin also presents a theory of Capitalist accumulation that reveals the engine behind Nurkse’s (1953) cycle of Poverty. But is there a way in which African countries can successfully tackle poverty? For this to happen, issues of state, power, and class struggle must be examined more rigorously. The second view is the view of development according to the policies of the multilateral institutions, such as The World Bank and IMF. The main outcome of The World Bank and IMF policies is believed to be the main cause nof poverty, through their foreign aid, which created the Third World countries, LDCS in general, and SSACs in particular, and caused them to be in debt or to become highly-indebted poor countries (HIPCs). The impact of foreign aid on development and the crises of debt will also be reviewed in this chapter. There are several different theories concerning the impact of aid on development. One emphasizes the relationship of power between rich and poor countries. An example of this is the Dependency Theory, which views underdevelopment and poverty as a consequence of exploitation by powerful Capitalist countries, or “the center,” of the weak, developing countries, or “the periphery.” “Dependendists” have looked at aid as a tool of Capitalism to reinforce exploitative behavior, thus deepening underdevelopment and poverty. ‘When many African countries gained independence in the middle of the 20 century, they were confronted with essentially two paths to development. On the one extreme was the Marxist path advocated by the Soviet Union, in which its own development from a backward and crumbling empire to an international superpower was given as an example. The Marxist path to development sought to destroy the Capitalist elite who controlled industrial production at the expense of its workers, on whose labor and toil the Capitalists thrived. In this scenario, developing countries could only break the cycle of poverty by abolishing the Capitalist class and bringing forth a politico-economic system in which the workers, the proletariat, dominated. On the other hand, the United States and its European allies identified a neo-classical path to development. The neo-classical ideologue’s prescription for advancing from poverty to prosperity called for the unfettered growth of the Capitalist class (Amin 21976). They believed that the Capitalist class’s competition for profits would expand the markets of the developing countries as the investment of capital flowed into these countries. With the collapse of the Soviet Union and its satellites in Eastern Europe, the neo-classicists declared victory. Indeed, there was very little to be admired by the failure of the Soviet experiment. The states and command structure of the Soviet system had created a corrupt and unyielding “superstructure” that collapsed under its ‘own weight. Certainly, the proletariat in these countries did benefit from the health and educational services that these states provided, but these states doomed its proletariat to a collective sharing of misery. The neo-classicists’ cries of victory, however, sought not only to uncover the shortcomings of their rivals but also to hide the failures and contradictions of the very Capitalist system they vigorously advocated. With the onset of the debt crisis, the neo-classicists launched an aggressive campaign in which they used intemational institutions like the International Monetary Fund and The World Bank to impose neo-classical free-market ideas on developing countries (Hancock 1989). Hancock states that: The IMF is not now—and never has been--an aid agency. It is, however, so heavily involved in the provision of finance to the Third World that it has become an integral--indeed, a central--part of Development Incorporated. Its mission is to supply member states with money to help them to overcome short-term balance-of- payments difficulties, but such money is only made available after the recipients have agreed to policy reforms in their economies...[I}t has been estimated that every dollar provided to the Third World by the IMF ‘unlocks’ a further four to seven dollars of new loans and refinancing from commercial banks and rich-country governments (Hancock 1989:58). B‘Szymanski (1978) argues that in periods of social and political crisis, orthodox notions of Marxist theory prevail, while in periods of stability and prosperity, open formulations make more sense. If, under the heat of the Cold War, a rigid and static interpretation of Marx dominated the world stage under the active support of the Soviet Union, then its collapse opened room for the development of dynamic Socialist ideas that actively advocate for the periphery in its development schemes. Conscious of the class struggle, this path to Socialism strives to ensure that the mass of people that the Capitalist system relegated to the poverty of the periphery has the right to gain greater control of the means of production. In developing countries, one is beginning to see the synthesis between Socialist ideas and indigenous cultural norms that, at least for the time being, seems promising. Cause of Underdevelopment (Poverty) Most of the past and present economics and social science writers have wondered whether African or Western theories reflect their own depiction of the world. To give a background and to familiarize the reader with how these scholars’ review and divide the world politically, economically, and culturally, a brief discussion of two theories—the “Dependency Theory” and the “vicious circle of poverty” theory, is provided. In pre-Capitalist societies, a variety of subsistence-based economies existed in which individuals had greater control over their means of production. Industrialization, according to Marx, radically transformed this situation by creating a Capitalist class that controlled the means of production. At their mercy were the workers, who lost whatever control they had over their own means of production. The disparity between the Capitalist class and the economically vulnerable classes that 14they dominated in both the agricultural and industrial sectors generated much of the poverty that we see in the developing world today (Chilcote 1981). He also states that the dominance was both material and intellectual: The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class, which is the ruling material force of society, is at the same time its ruling intellectual force. The class, which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of ‘mental production are subject to it (Chilcote 1981:109). ‘Amin and Wallerstein expand on Marx’s theory by elaborating on the center- periphery theory, thus revealing the inernational nature and impact of unequal development. While Marx avoided exploring underdevelopment as such, he did address Capitalism’s tendency to generate both wealth and poverty. Amin and Wallerstein both address underdevelopment directly. First, Amin transcends the national Capitalist and Socialist systems presented by early advocates of development by stating that there “are not two world markets, one Capitalist and the other Socialist, but only one, the Capitalist world market” (Chilcote 1981:147). According to Chilcote, Wallerstein then expands on the notion of this one single Capitalist market by attributing two major characteristics to it. First is the Capitalist market system, which contains a series of state structures. ‘The second is the single world market, which has three levels, the core or center, the semi-periphery, and the periphery. The core consists of the developed countries, while newly industrializing countries and poorer developing countries hold the semi-periphery and the periphery, respectively. An international class struggle emanates from the struggle between these classes. Hence, states Wallerstein: 5Those on top always seek to ensure the existence of three tiers in order to better preserve their privilege, whereas those on the bottom conversely seek to reduce the three to two, the better to destroy this same privilege. This fight over the existence of the middle tier goes on continually both in political terms and in terms of basic ideological constructs (Chilcote 1981:314) In this struggle, the center exploits the periphery, and poverty is created and perpetuated. On a global scale, the center/periphery class struggle is waged between developed and developing nations. Locally, this struggle can manifest itself in the form of urban and rural areas fighting over scarce resources (David 1997). There is diffusion in the means of production beyond the traditional center of the Capitalist world in Europe and North America. With it is an international diffusion of both the Capitalist and bourgeoisie classes and the working proletariat class across the globe. It thus is not surprising for the interests of Capitalists in the center and periphery (i.e., the Third World) to collude against those workers in both areas (Korai 1990). This global penetration of the forces of Capitalism results in unequal development, in which many countries of sub-Saharan Africa seem unable to combat the exploitation mechanisms of the world economy with their meager resources. Hence, many SSACs share a weakness in their economic performance. Dependency Theory A theory needs both a subject and an object. The prerequisites of any new development theory that aims to be practical must be an understanding of how the global market and social forces are behaving (Leys 1996). Dependency, a formal theory of underdevelopment, has been discussed by economists and politicians since the end of World War I, when the leaders of the Third World countries launched a revolution for independence, a national movement seen throughout LDCs in the Third 16World. Webster's New World Dictionary defines dependency as ‘a territory or a possession subordinate to its governing country.’ The Dependency Theory has been applied primarily to Third World countries in Asia, Africa, and Latin America. Tisch and Wallace (1994:161) define Dependency Theory as an explanation of “the underdevelopment and poverty of poorer countries in terms of their dependence on richer countries for various historical reasons within the context of the expansion of Capitalism.” Dependency means that Third World countries rely on developed countries domestically and internationally. A historical review of the literature shows that the Dependency Theory was most popular during the 1960s, especially by Latin American social scientists, who are considered to be the major contributors to the theory. Young scholars from the Caribbean, the Black Power movement, and the Peoples National Party (PNP) of Jamaica attacked the ideas of West Indian economist Arthur Lewis' (1978), who believes that the industrial revolution did not depend on the raw materials of the Third World countries (Krieger 1993:242). Thus the Dependency Theory emerged from Latin America during the 1960s and later spread to Asia and Africa. In Asia, the Dependency Theory was not as influential as it was in Africa. In Africa, the Underdevelopment Theory was centered at three places: the Institute for Economic Development and Planning (IEDP) headed by Samir Amin, the Council for the Development of Economic and Social Research (CODESRIA), and the University of Dar es Salam Faculty of Arts and Social Sciences. The African ‘Lewis published a small controversial book titled The Evolution of the International Economic Order in 1978. He talked about the division of the world into exporters of primary products (Third World countries) and exporters of manufactured goods (e.g., France, Germany, Great Britain, and the United 7continent, having a history of struggle against colonialism and imperialism, made the Underdevelopment Theory more influential. | The importance of the Underdevelopment Theory in Africa is due also to the influence of CODESRIA, as well as to the Organization of African Unity (AU), which was a meeting place for the leaders of the more radical nationalist and liberation movements (Krieger 1993:242). The Underdevelopment Theory is usually associated or combined with Karl Marx, the German thinker who had a different view regarding development and the Third World. Marx’s views on development processes came from his materialist concepts, in which he believed that development was based on historical materialism and dialectical methods (Krieger 1993). Marx's understanding of development was that there was a close relationship between dialectical and historical materialism, even though he never wrote an explanation of the dialectic. Marxism saw the development mode as desirable and feasible. West European countries mostly go through this stage as part of globalization and a process of transition. Marx and Norodniks dispute that it is necessary to go through a Capitalism mode to reach a process of globalization of Capitalism, which is a transition from a pre-Capitalist mode of production to Socialism (Mengisteab 1996). There are two views of the Underdevelopment Theory: the classical Marxist view, which represents the decline of the theory, and the non-Marxist view, which represents the rise of the theory. Amin represents the classical Marxist view. Amin argues that growth in LDCs was neither feasible nor progressive. His reaction was States). Lewis also talked about the adverse factorial terms of trade for the products of developing countries, emphasizing the low wages. 8that LDCs were desirable to develop because of the interest of the developed world in keeping them in this stage. Krieger states that: Economic development in underdeveloped countries is proudly inimical to the dominant interests in the advanced Capitalist countries. Supplying many important raw materials to the industrialized countries, providing their corporations with vast profits and investment outlets, the backward world has always represented the indispensable hinterland of the highly developed Capitalist West. Thus, the ruling class in the United States (and elsewhere) is bitterly opposed to the industrialization of the so- called “source countries” and to the emergence of integrated processing economies in the colonial and semi-colonial world (Krieger 1993:243). In addition, Amin, an African scholar from Egypt who played a major role in the decline in popularity of the Underdevelopment Theory, supported the Marxist reaction. Amin contributed to the popularity of the Dependency Theory by arguing that the industrial countries and LDCs were organized in a way that prevented Capitalism from performing a historical role. Since the imperialistic period, the LDCs have not been able to develop. With the rise of monopolies, however, the “development of Capitalism in the periphery was to remain extroverted, based on the ‘external market, and could therefore not lead to a full flowering of the Capitalist mode of production in the periphery” (Amin 1985). He also observes that the status of a country in the global economy is defined by its competitive capacity on the world market. Thus, while the United States remains an unmatchable superpower in in the global economic Politico-military terms, it occupies a less commanding posi system (Edoho 1997). Classical Marxists tend to believe that the spread of the Capitalist market will result eventually in a high mass-consumption society, as described by Rostow’s fivestages of development, introduced during the 1950s. Known as Rostow’s stages, they are: L The traditional society; 2. The preconditions for take-off into self-sustaining growth; 3 The “take-off,” when all structural boundaries to industrialization have been expressed; 4. The drive to maturity, when all needs for industrialized society, such as. technology, have been introduced; and 5. The age of high mass consumption, when people go beyond consumption. Classical Marxists argue that, even though the transition to Capitalist at the periphery will be a full crisis as it was in Europe, eventually it will happen (Todaro 1997:72). The second reaction to this theory came from non-Marxists, mainly Latin American social scientists, notably Prebisch, Cardoso, Sunkel, and Dos Santos, associated with the UN Economic Commission for Latin America (UNECLA). Essentially, UNECLA agreed that Capitalism would emerge as a supporter of underdeveloped nations. Thus, UNECLA assumed a national interest to stand against the anti-imperialists and divided the world into an industrial center and a periphery. Mass production and diversification (homogeneous) characterize the center, and the periphery specializes in a few raw materials (heterogeneous) (Todaro 1997:241). Thus, dependency theorists tend to believe that it is impossible for ex-colonies, undeveloped Third World periphery countries, to move from the “vicious circle of poverty” (backwardness) and overcome their poverty by the market system, which is now applied in the world. While SSACs are attempting to reach the economic and social status that their counterparts in the developed and industrialized world enjoy, their path to development is fundamentally different. They face an uphill challenge: 80their current poverty and misery sustains the prosperity of the more developed nations. Chilcote (1981) aptly summarizes this unequal development: ‘The underdeveloped countries should not be confused with the advanced countries at an earlier stage of their development, for the underdeveloped countries are characterized by an extreme unevenness in the distribution of production, which primarily serves the needs of the dominant center. Underdevelopment is accentuated and growth is blocked in the periphery, making autonomous development impossible (Chilcote 1981:234). Peripheral countries specialize in labor-intensive products, whereas the center depends on high-tech produced products. With the exception of Brazil and India (both of which have large internal markets), a dependency relationship will result in a more problematic and less beneficial way than the modemization theory assumes (Leys 1996: 147-9). ‘The non-Marxist theorists, especially Cardoso, who taught at the University of Brazil and became the president of Brazil, argue that the center and the periphery are a thesis where there is a situation of class inequalities and conflicts through a process of uneven development. What will happen at the periphery is the development of underdevelopment, so the underdevelopment of the periphery is a must for the development of the center (David 1985). Since there is a lack of access to the economic surplus in the satellite countries, such as in Latin America and Africa, the LDCs in general will remain underdeveloped. Put another way, in order for one to be rich, another has to be poor, and to remain rich, another has to remain poor. To show that a nation is developed, there has to be a less-developed nation to compare it with. So we don’t talk about the law of contradictions, but about self-contradiction. Basically, what they are talking about is that there is no free market or free tradesystem. As Lewis notes, it is a matter of power only, power between the LDCs, who are exporters of primary products, versus the exporters of manufactured goods (Lewis 1978) In addition to Lewis, there are economists who specialize in the Development Theory, such as Rostow. According to Rostow's stages of growth, all Third World countries are in the first stage, “the traditional society,” because all Third World countries have low levels of technology and productivity. On the other hand, all developed nations are in the fifth stage because they are the stage of mass consumption: “...in order to be successful, copy the successful.” Rostow states that all countries around the globe have to follow the same procedures or steps, to go through the stage of a traditional society. However, every country around the world has different problems and different solutions. This is the challenge facing multilateral institutions such as The World Bank and the United Nations in solving Third World countries’ problems. One has to study the culture, including the religion, Political system, educational system, etc, for each country individually before applying Western models and theories. ‘The Vicious Circle of Poverty The model used to describe the technical side of the issue of poverty is the “vicious circle of poverty.” In the late 1950s, economists such as Nurkse (1953) developed this approach, the vicious circle, which sometimes is treated as something obvious, to describe poverty. The elements of this circle of poverty include productivity, income, savings, investment, and capital, and how economic backwardness forces the economy of developing countries into stagnation. The 82exploitative mechanisms of the Capitalist, industrialized nations keep this circle of poverty turning (David 1997). The structures of SSACs are closely related to one another in a circle of causation that Nurkse (1953:4) calls the vicious circle. “The vicious circle,” he notes, “implies a circular constellation of forces tending to act and react on one another in such a way as to keep a poor country in a state of poverty.” Each element in the circle helps to reinforce other elements. The increase in population growth in developing countries has an opposite effect on production. Low productivity results in low income per person, which in tum leads to smaller savings and lower purchasing power. The cumulative effect of the circle results in a low investment incentive, and the circle moves forward and backward (Figure 2). The low income of a person forces one to have low productivity, the effect of which is low purchasing power (low demand) The diagram is not difficult to imagine. Since “a poor man may not have ‘enough to eat; being under-fed, his health may be weak; being physically unfit, his working capacity is low, which means that he is poor, which in turn means that he will not have enough to eat, and so on” (Nurkse 1953:5). We can divide the vicious circle into two perspectives: The first is supply of capital, which is governed by the ability and willingness to save (Figure 3). The second is the demand for capital, which is governed by the incentive to invest (Figure 4). Thus, the problem of African countries is mainly a shortage of capital and a low incentive to invest. Furthermore, in addition to a lack of capital, some countries face a shortage of mineral resources. 83jon of Market Size African countries focusing on breaking the circle of poverty must invest in capital equipment. This leads to modernization and entry into the Capitalist system on a more even footing. Some countries succeed in moving from stagnation, thus breaking the vicious cycle of poverty. These countries then move on to more advanced stages of development (Voices of the Poor 1997). Most developing countries face difficulties because the small size of their market is caused by a lack of incentives for individual investment. “The classical law of markets,” observes Nurkse, “passes under the name of Say’s Law. Take John Stuart Mill’s formulation, which says that ‘every increase of production, if distributed without miscalculation among all kinds of produce in the proportion which private interest would dictate, creates, or rather constitutes, its own demand” (Nurkse 1953:4). Economic Backwardness —_— ~~, . Low Capital Low Productivity . Low Income Ne ‘Low Savings Low Demand Figure 2, The Vicious Circle of Poverty 84‘Small Capacity to Save Low Investment ——— “o™ ! ! ! I | Lack of Low I Low Little I | | I I i ! ! Capital Income Productivity Buying \ 4 \ Power Low Productivity Little Real Income Figure 3. Supply Side Figure 4. Demand Side African countries can get out of this cycle by emphasizing the industrial sector and trying to expand this market by creating a demand for industrialization. People will meet their needs. One example is the shoe industry. People will not spend all their income buying shoes from the domestic market; however, they can exchange their products with other markets, such as food, clothing, cars, and so on (Nurkse 1953:9). Thus, countries can increase the power of their market by exchanging products and by bringing foreign currency into their market. People in developing countries do not invest in capital, or at least not in the private sector, because they are not willing to take risks. People in low-income countries have no initiative, and all the large investments are considered to be government obligations, such as railways, power plants, and water works (Todaro 1997). To move from the “vicious circle of poverty,” countries have to plan well for their markets and try to diversify the new demand, because people demand more than a pair of shoes. In addition, balanced growth can be reached by ordinary price incentives. ‘Schumpeter’s theory of economic development is generally treated among economists 85in the advanced and industrialized countries as a theory of business cycles. However, it is also considered a theory of economic development. This theory focuses on the creative entrepreneur who takes action, carries out innovations, and adds new goods and services to the markets (Nurkse 1953:13), Entrepreneurs generate new investment, which helps make markets, and create healthier industry. Real income will affect people's consumption by increasing the demand for goods and services in the long run. Expansion of the local market will demand more labor to cover the factories needed to increase their products. In this way, factories generate new income for the people who will, on their side, increase the demand again. As some of the people’s income is placed into savings, this can lead to an increase in the capacity of investment. Surplus in savings also can challenge investors to invest in a new industry, which can work hand-in-hand with other industries. In this way, the market will expand dynamically. Shortages in the supply of some goods will be reduced by investors’ incentives the same way as a shortage in demand. New investors will notice the shortage in demand by decreasing the price of such goods or services, and then investors will take the opportunity to fill the gap between supply and demand. Thus, the price will go back to the equilibrium point. The equilibrium of the market will depend mostly on the individual’s incentives to invest. Whenever investors find a gap, they will try to immediately meet the shortage either in supply or demand. Obviously, then, investors will try to maximize their profits by closing the gap between supply and demand for the market, and the price will go back to the equilibrium point, However, in small degrees, this theory is not good enough where population pressures exist.There are many obstacles to overcoming the primitivism of production that most African countries have. This is really affecting the way people produce and the contributions they make. Obviously, this will also affect the market. Factories are heavily dependent on labor. Modern machinery is uncommon in industry, which can affect market growth. In addition, industrial facilities such as transportation and communications are not available in most underdeveloped countries, and this affects the expansion of the market and the future of potential markets. Economic progress must be well organized, so that underdeveloped markets can compete with advanced countries’ markets. The public and private sectors in these countries must work together to meet the demands of the marketplace. The government and private sector should work hand in hand to balance the market; economic growth will not happen spontaneously. People in African countries must take risks and initiate and develop their own markets, especially the middle class. Deficiency in a developing country’s market is due to the people’s low purchasing power. People in developing countries have low wages, which barely meets an adequate standard of living. The real capital in African countries influences the supply of production, which in turn affects the demand. Obviously, the law affects the supply of goods and services. Generally, governments of developing countries should concentrate on the private sector. The government should speed up privatization of the public sector so that the quantity and price demands will be at the equilibrium point. The performance of the economy will be determined mainly by the strength of the market. Growth rates of gross national products (GNP) and per capita 87GNP between 1980 and 1991 were 2.6% and —1.1%, respectively, as compared with 4.6% and 3.6% for all developed countries (Mengisteab 1996) Furthermore, poverty in SSACs tends to be a political issue rather than purely an economic issue. The vicious circle does not talk about people’s opportunities in the society. The “vicious circle of poverty” fails to link the economy to the rest of society. The economy and society work hand in hand, but the circle separates the economy from society. The circle also fails to link political forces to the economies of the Third World. Most of the Third World countries were colonized by foreign powers. Colonization has had a bad effect on the economies of the Third World. One must go outside the circle and look at the society and the impact of the political issues on the country. Thus, the theory lacks sufficient interpretation; by itself it does not stand up to scrutiny. In the 1950s, the circle talked about absolute poverty, where people did not have anything to eat or any place to work, while the economy talked about relative poverty. This new kind of poverty is based on the structure of the economy. Depending on the country, you have some people at the bottom; poor families cannot get their children to school because of a lack of transportation. Washington, DC, at one time, could have been called a state of a new kind of poverty—poor families who lost their jobs because of uneven development programs. One must look to the external factors, such as politics and the environment, which are very important factors, in any attempt to break the circle. Breaking the circle requires very intensive work. You cannot change the economy unless you change the society.Foreign Aid to Sub-Saharan African Countries According to the Organization for Economic Cooperation and Development (OECD), foreign aid is defined as a transfer of concessional resources from one government to another or from a government to an international aid agency or non- governmental organization. The resource transfer must be in the form of a grant. If it is a loan, it should carry a grace period, interest rate, and repayment terms that provide a growth element of at least 25%. The resources must be provided with the ostensible ‘goal of promoting economic development in LDCs. Based on this definition, private contributions by NGOs, military aid, aid to procure goods and services from donor Countries, or aid to promote political objectives must be excluded from this definition, Foreign aid to SSACs creates dependency, which will be discussed later in this chapter. Table 4 shows the relative importance of aid on the GNP in selected African countries in 1987. Table 4 Foreign Aid as a Pe of 1987 ‘Country Total Aid as a Percentage of GNP Guinea-Bissou 89.3 Gambia 55.6 Mozambique 51.7 Chad 28.3 Malawi 23.6 Zambia 22.5 Source: World Development Indicators by World Development Bank, 1990. Foreign aid has received a great deal of attention since the end of World War Il. It started after the war to alleviate the miseries of the war, mainly in Europe. Foreign aid had a significant impact on the rebuilding of Europe after the war under 89the United States’ Marshall Plan. Baldwin notes that the massive aid that worked so well in Europe was a failure when it was applied in the developing world (Baldwin 1985). Economic assistance to Third World countries in general and to African countries in particular from bilateral and multilateral institutions underwent remarkable growth during the 1970s and 1980s. Todaro (1996) argues that donors gave aid primarily to help their political, economic, or strategic self-interests. There is no historical evidence suggesting that donors give aid without expecting any benefits ‘There are two broad motivations that are often interrelated: political and economic. Motives for Supplying Foreign Aid Foreign aid is given for many reasons, including political, strategic, commercial, and humanitarian. Most governments’ stated goals for their aid programs are usually to promote development in recipient countries. Reducing poverty is only one motive and it is usually far from the most important. World Development Indicators in 1988 show that about 41% of aid was directed to middle- and high- income countries. Also, there are great disparities in the per-capita allocation of aid, and the most general per-capita allocation does not necessarily go to the poorest countries (Table 5). Despite their poverty, SSACs have received the least aid per capita. Many aid programs in donor countries cover an assortment of activities, such as commercial and strategic initiatives, which often have connections with development. According to the same report, only 8% of the US aid program in 1986 could be identified as “development assistance devoted to low-income countries.” Recipient countries arerequired to buy goods and services from donor countries. Approximately two-thirds of all aid supplied by Development Assistance Committee (DAC) members is in this category (World Development Report 1990:128). Table 5 Capita Aid Receipts in 1988 Country Aid Receipts GNP per Capita per Capita Israel 282.07 8,650 Jordan 108.95 1,500 Gambia 102.63 200 Senegal 78.85 650 Zambia 63.73 240 Ethiopia 21.05 120 India 2.58 340 China 1.84 330 Nigeria, 1,09 290 ‘Source: World Development Indicators by World Development Report 1990. Walle (1996) notes that economic assistance to Third World countries in general and to SSACs in particular is granted for political and economic reasons and has little to do with the situation in the individual country. The obvious reason for this is that, after the Cold War, foreign aid fell dramatically, especially in the 1990s, mainly because of the collapse of the Soviet Union (Eastern bloc) and the economic recession in the Westem countries. Walle also states that most of the Westen countries decided to cut back on aid to African countries. For example, the United States decided to cut aid dramatically to its bilateral and multilateral institutions such as The World Bank. The US net official development assistance (ODA) disbursed fell from 0.021% of GNP in 1986-87 to only 0.009% of GNP in 1997 (Human Development Report 1999). France, Belgium, England, and Germany also substantially reduced their economic and political support to their former colonies. a1‘As mentioned earlier, foreign aid to African countries is granted mostly for reasons besides development; however, there is wide disagreement among scholars regarding the objectives of foreign aid. In this context, one has to distinguish between two periods. The first period lasted about two decades (1950-1970) during the Cold ‘War between the Eastern bloc, led by the former Soviet Union and its allies, and the Wester bloc, led by the United States and its allies. In short, the rivalry was between Capitalism and Socialism. The victims of the conflict between these two ideologies, as might be expected, were the developing countries. Yet, Africans learned quickly to exploit these various competitions to extract aid while avoiding political concessions to those providing it (Lancaster 1999). During the Cold War, the US government encouraged developing countries to follow the Capitalist system by means of its foreign policy tool, foreign aid. The US government was very active in influencing developing countries economically and politically, since most of them were in need of foreign aid and hard currency, such as dollars and pounds. For example, the US government supported Mobutu, then president of Zaire, to remain on their side and adopt the Capitalist system. Mobutu ‘was controlling the country by a strong special police, or by “fire and steel,” and a strong military supported by the US, which allowed him to remain in power for more than 30 years. The US provided the Mobutu regime with military assistance, including a strong army, which allowed him to suppress political opponents, especially those who were trying to change the country’s ideological system (Tisch and Wallace 1994) Furthermore, the US government left Master Sergeant Samuel K. Doe of Liberia in 1990 without any foreign aid funds. He lost access to loans from The World Bank, the 92IMF, and the African Development Bank. US aid ended because of Doe's failure to pay $7 million on a military loan from Washington, DC (Reno 1998). Another example of foreign aid during the Cold War was the foreign assistance provided by the Soviet Union to Cuba, North Korea, and, to some extent, China. In addition, the Soviet Union provided foreign aid to Ethiopia during Mengistu’s regime, which created tensions between Ethiopia and its neighbors, Saudi Arabia and Somalia Thus, foreign aid during the Cold War era was granted for political reasons, mainly to attract developing countries to join the US and her allies rather than the Eastern bloc (Gilpin 1987). Therefore, the objective of foreign aid was not to develop recipient countries and alleviate poverty—ideological forces directed it The second period of foreign aid is the post-Cold War era. Foreign aid in this period basically consists of three types of financial institutions: multilateral, bilateral, and private banks. Private banks are identified by their high interest rates and short- term loans, which mostly go to North Africa, and public or governmental loans from such institutions as The World Bank, known for their long-term projects and huge amounts of money. Private banks are more aggressive and charge high interest rates depending on the credit history of the recipient government (David 1985). This behavior by private banks caused major problems for the recipient country, such as budget deficits, a weak exchange rate, and a lack of foreign currency. Thus, most recipient governments, especially those that were classified as high-risk countries, stopped taking loans from private banks and switched to public or international financial institutions. 93The United States gives foreign aid, not in order to develop a country, but for strategic reasons. That is why Israel is the top recipient of US foreign assistance. Even though Israel is a small country in terms of size and population, it consumes 25% of all US assistance overseas (Figure 5). ‘Type of Support Support in US Smillions) Annual donations (tax deductible) from private US citizens to Israel 1.0 Annual sale of Israeli bonds in the US 0s Annual commercial loans from US banks to Israel 10 US government annual military and economic aid to Israel 40 Total annual private and public assistance 65 ‘Annual assistance on per-capita basis 13 Total annual Israeli GNP 24.0 Percentage of GNP coming from US assistance 25% Figure 5. Estimated American Support to Israel Source: The Washington Report on Middle East Affairs, Nov 1992. ‘The Effectiveness of Supplying Aid The effectiveness of aid, politically and economically, in Third World countries in general and in Africa in particular, is an important issue that has been discussed by international financial institutions (IFI) as well as by African governments, for several decades. Aid to Africa mainly started in the mid-1950s, after most Aftican states following their independence and creation of their own development strategies. Foreign aid increased during the Cold War (1960-1970), when the conflict between the former Soviet Union and United States and their allies—Western bloc and Easter bloc—dominated the political economy of the world. Some African countries played around with these two blocs by getting aidfrom both or by switching around—sometimes being Socialist and sometimes adapting to the Capitalist system. Foreign aid to SSACs has increasingly brought about doubts about its effects. Donors still ask the same question. Africa has been receiving foreign aid for decades and yet the world has not seen any significant development. Outside donors cannot see any correlation between aid and growth. Officials from IFIs notice famine, high infant mortality, high adult illiteracy, weaknesses at the micro- and macro-economic levels, and low savings and investment rates (Bird 1995). Above all, poverty still widely persists all over the continent. Donors see economic weaknesses in the recipient countries. Lower aid effectiveness and poor economic performance have forced donors to further cutback on their foreign aid. To answer all donors’ questions simply, one can say that foreign aid was granted for various reasons but not for development reasons. These will be discussed later. There are two views regarding the effectiveness of foreign aid. First is the view of the South/South countries, such as foreign aid given by Saudi Arabia, which will be discussed in the next chapter. This foreign aid has helped African countries to eliminate dependency and alleviate poverty. The other view is the North/South country division, which includes aid given by industrial countries to poor countries. This North/South aid reinforces colonialism. Foreign aid has helped donor countries more because most of the foreign aid is tight aid, which means all material needed for the projects has to be purchased from the donor country at a high price. A United Nations Development Report (1999) about aid shows that foreign aid benefits the industrialized world. More than one-third of US exports goes to developing countries, 95and one-fourth of all US private investments are in those countries. Given that 80% of the consumers of the world live in the developing world, statistics in the same report show that stagnation of the heavily indebted poor countries is said to cost the United States 1.7 million jobs. On the other hand, if the poorer countries could again achieve the growth rate of the 1970s, US exports could jump by as much as $30 billion a year within three years, creating approximately 600,000 jobs. According to Nyang and David, conservative studies state that 20 cents out of each dollar (20%) spent on foreign aid is to cover the loan's expenses. The other type of expense is administration of the loan, including salaries, travel expenses (sometimes donors use their own jets or go first-class on commercial airlines), and accommodations, with most donors going to five-star hotels such as the Hilton or Sheraton, which are foreign-owed companies, not locally-owned hotels. Foreign aid given by industrialized countries usually is tied to procuring goods and services to be bought from their markets. A serious assessment of the impact of foreign aid on the recipient countries has shown conflicting paradigms. Aid has not been effective in promoting economic development. It has enhanced urban-biased policies by encouraging rapid growth in urban populations and by enhancing the disparity in purchasing power between urban and rural areas. Foreign aid has a passive impact on the growing social inequalities. Aid has favored urban over rural populations and public over private enterprises (Ellis 1996). Aid money is spent in the capital rather than in the countryside, Experts and training are located in the capital rather than in the villages. Moreover, in the education sector, according to recent studies, aid money is being spent on secondaryand higher education, such as universities, rather than on primary education. Aid spent on poverty alleviation programs is less effective because the aid usually focuses on big projects, such as hospitals and highways, and not on small clinics or secondary roads. Debt Crises in Sub-Saharan African Countries The greatest challenge facing SSACs in the new millennium is how to pay their debts. Foreign aid causes economic crises, which render most countries unable to pay their debts. They remain HIPCs. The IDA has initiated a program designed to facilitate a comprehensive resolution for HIPCs that are eligible to borrow only from it. The Human Development Report of 1999 notes that there is slow progress in the reduction of debt and in tackling the accumulated debt of 41 HIPCs. The same report notes that, in 1997 the total debt of the developing countries had reached almost $2.2 trillion. Of the hardest hit 41 HIPCs, 33 are located in Africa. This debt burden drains the public budget, absorbs resources needed for human development, and inhibits economic growth. Among the individual countries, the debt export/ratio vary significantly. For example, it has ranged from 42.9% in Lesotho to 2850.9% in Guines-Bissau, and twenty eight countries had debt export ratio of over 200:1 (Gordon 1996:116). The IDA notes that, since 1980, the growth of HIPCs has tripled; two-thirds are the result of unpaid or earlier debts. The nature of the development has also was only one-fifth of the debt. Today, debt crises are increasingly linked to multilateral institutions such as The World Bank and the IMF. The shift from private o7debt to official debt and IFIs, opens the door for policymakers to find solutions to the economic crises of LDCs. An acceleration of debt forgiveness under the HIPCs ive is essential. Forgiveness will challenge LDCs to focus on developmental projects. Cancellation of all debt is the objective of the Jubilee 2000 initiative supported by many churches and NGOs. The debt burden has undermined economic growth, health, and education. Debt service in most of the HIPCs, such as Sudan, exceeds annual expenditures on health and education (World Development Report 2000). Debt forgiveness is a hot topic in the IFls and HIPCs, but resources for forgiveness must come from other funds and not from new loans; “robbing Peter to pay Paul” is not the way to go. Reliance on IFls to solve Africa’s political and economic problems has had a devastating impact on the African people as well as the governments. It is undermining the ability of governments to run their country effectively. Reliance on foreign aid has caused the continent to have a poor public sector, which in turn has not allowed the recipient government to pay its civil servants well. It has created a public bureaucracy. Foreign aid has become a key element in stabilizing the country and its political economy. ‘What Africa really needs is major debt forgiveness or a “Marshall plan.” Ultimately, the primary objective of aid should be the long-term development of the affected state in Africa. Strategies should be directed toward the importance of macro-economic policies and long-term economic success. Foreign aid should promote, or at least not undermine, the emergence of macro-accountable and transparent governments. Foreign aid should emphasize civil service reform. 98Downsizing of the civil service, sometimes by up to 50%, as experts in the IMF suggest, in a particular African country can be costly and politically unaffordable. African governments should be allowed to experiment with policies and learn from their mistakes. Foreign aid should concentrate on improving indigenous technical capacity. As the aid flow declines in quantity in the years to come, the challenge will be to increase its quality, in particular to help promote effective states in Africa (Baldwin 1985). The debt incurred by trade in many SSACs is another rapidly growing problem. Many African countries have deficits in their balance of trade (exports minus imports), meaning that these countries import more than they export. When faced with a deficit, most countries dip into their official reserves, which is like the country’s savings account. The World Bank has recommended that every country should have an official reserve to pay imports for six months. Some developing countries, especially some SSACs, do not have an official reserve for one week, or even one day. Thus, these African countries are forced to go to commercial banks to get loans, which is more risky. Commercial banks provide loans only to those that have mineral resources, such as South Africa and Nigeria, because most commercial banks consider Affica to be both a political and commercial risk. On the other hand, most private investments from the dominant center go to South America and East Asia to minimize the political and economic risks; other donors, such as the United States and Japan, invest in countries that have natural resources (Gordon 1996).Challenges Facing African Countries ‘The economic structure of sub-Saharan African countries is underdeveloped. Fusfeld (1983:680) observes that developing countries in general, and SSACs specifically, differ from advanced countries in several important respects. The “typical” poor or underdeveloped countries have: 1 ‘A relatively large portion of their resources devoted to primary production (agriculture, mining, and fishing) and a relatively small proportion devoted to manufacturing; A rapidly growing population; ‘Substantial amounts of unused or under used resources; ‘An economically backward population, with a high illiteracy rate and relatively low average levels of educational attainment; A lack of adequate capital for the development of its human and natural resources; and ‘An export orientation in those sectors of the economy that have been developed. In most African countries, the population works in the agricultural sector, which is labor intensive and into which modern input is minimal. Modern input is defined as the implementation of fertilizers, tractors, and a variety of seeds needed to improve production. In the countries of Southeast Asia and Africa, such as India, Pakistan, Kenya, and Tanzania, the use of oxen is a labor-intensive method of farming, but it is not unusual. There is a large agricultural sector that is usually overpopulated; in the United States, on the contrary, a mere 2% of the population feeds the whole 100country (Fusfeld 1983). However, the majority of farmers in underdeveloped countries are “uni-model,” where most of the farmers have mixed farms and comprise relatively small family units. A majority of the farmers are responsible for feeding the population and thus do not have enough foodstuffs to export. Moreover, the top civil servants in charge of small farms usually buy the whole land or entire crop, or even rent the land to the people themselves. In this instance, we have the urban core’s exploitation of the rural periphery. For example, 30% of the African population lives in urban areas and 70% in rural areas, whereas in the United States only 25% of the population resides in rural areas. In contrast, 75% of the African labor force is in agriculture, whereas in the United States only 5% works in agriculture (Human Development Report 1999). In 1987-1989, food production per capita in underdeveloped areas had fallen to 95% of the 1980 level. The daily per capita calorie supply in 1988 was about 2,000 calories, equivalent to the level of 1965, which is below minimal nutritional requirements. The poverty line level for daily calorie intake is considered to be 2,250 calories per day (The World Bank, African Development Indicators 1994-95). Products of African countries are oriented toward foreign trade. The main income source of poor countries usually comes from a single product, such as coffee in Colombia, bananas in Somalia, tea in Sri Lanka, copper and other minerals in Congo, and oil in Saudi Arabia. Thus the economies of SSACs are oriented toward a primary product as opposed to secondary (manufacturing) products and service activities. The companies that are in charge of producing the raw materials are usually foreign-owned companies whose attitude generally is favorable to their own country. 101Politically motivated aid is usually supported by donor governments and is accomplished by the private sector, organizations or consulting firms. For example, the United States reduced aid to Southern Rhodesia (Zimbabwe's colonial name) in 1984 because it disagreed with Zimbabwe's votes in the United Nations. The telephone company, AT&T, left Chile in a disaster, without communications, in the 1970s, following orders by the US government to leave (Villalon 1998), Primary commodities by themselves are volatile worldwide. Their prices are very volatile in general, even in advanced countries. Developing countries’ incomes coming usually from one source only, a primary commodity, always create instability in their exporting income. When it comes to prices in the exporting developing countries, the world market or the importing countries rather than the exporting country set the price (Walle and Nead 1998). In other words, it is your product, but you have no right to set the price. For example, oil is imported mainly from OPEC countries, such as Algeria, Nigeria, and Saudi Arabia; yet the price of oil is set by the world market and by industrial countries that exercise pressure against developing countries, as is done with other raw materials, such as aluminum and rubber. Moreover, the capital, managerial, and technical skills that develop the commodity usually come from foreign countries (David 1985). In the export industry, one sees that the use of high technology and machinery is intensive. In the rest of the country’s industries, unsophisticated methods continue to be used to accomplish their jobs; in other words, they are also labor intensive. In terms of labor, most of the highly skilled workers in underdeveloped countries come from abroad. Foreign companies bring in their own people, either to 102work or to train, at the cost of the guest country. Western countries use a Third World country's land to experiment with their dangerous weapons, such as bombs, missiles, and tanks. For example, American allies in the second Gulf War in 1990 used bombs that contained uranium. The effects of uranium poisoning include blood cancer and sickness. Some NATO countries, such as Italy and France, have admitted that some soldiers have developed this kind of cancer, but the US government has denied it Also, it affects people who live in the area. It is worth mentioning that most of the wars fought since the 1950s have been fought in Third World countries. Industrial countries sell their military equipment, sometimes by pressuring or threatening the Third World country, in the name of forming a democracy or protecting civil rights. Signs in 1999 showed that a correction in the price of oil from $8 to $30 a barrel was in the works; so in the US Congress efforts were stepped up and threats were made to oil producers to postpone military agreements, including military spare parts, until the Price of oil was brought down by increasing oil production. Yet, a gallon of drinking water in most of the industrial countries, including the US, is more expensive than a gallon of gasoline. Sometimes, when the United States wants to examine or try out a new piece of military equipment, such as a tank or a missile, they call for military maneuvers so that they can use the guest country’s land as a test site; then, they define the joint military exercise as US aid to the guest country. Furthermore, some cases, the guest country pays the cost of the maneuvers, especially when the Americans will be in the guest country for several years, such as in the Gulf countries. Income in SSACs usually depends on one unrenewable source, which keeps the country at risk and under the mercy of the Western countries that use this resource. 103Imported goods and services into the developing countries are mainly for luxury goods, such as automobiles and manufactured goods. Thus, African countries face deficits in their budgets and an imbalance in their balance of payments. African countries import more than they export, regardless of their unrenewable resources. ‘The methods used in local industries are very labor intensive. ‘Weakness of Investment Incentives Public investment is inherent in the economy of developing countries. The ‘government (public sector) has a responsibility toward the people to provide water, electricity, and transportation, while the private sector does not. Breaking the ‘vicious circle of poverty’ will not happen spontaneously; it will come after a struggle that requires additional investment in capital equipment and human development. To this, a sizable domestic market is important. In underdeveloped countries, the ability to invest is limited by the size of the market. People have little buying power, and this influences the size of the market. Monetary expansion is not the solution, because this will lead to an inflation of prices if itis not coupled with an expansion of the market at the same rate. The limited size of the domestic market in a low-income country can to some extent create obstacles to individual companies and to development in general. The size of the market does not depend on the size of the country or its population, but on the extent of the country’s trade (Seznes 1987). Thus, we can say that the Chinese or Indian market is small if there is minimal trade with other countries. Also, the size of the market can be determined by the volume of production and by the flow of goods and services, because this would imply an increase in productivity and real income. ‘As productivity and income are increased, the size of the market will expand. 104Therefore, the size of the market depends on the volume of production, which causes its own demand, and capacity to buy means capacity to produce more goods and services. Conclusion This chapter discussed the nature of SSACs and focused particularly on a major obstacle that is stunting the growth of these countries—their dependence on the developed nations at the center and the exploitative nature of this dependence. The dynamics of development within these countries has been analyzed and the cycle of poverty, which weakens investment incentives, has been outlined, with the small size of the markets in developing countries perpetuated. There are two development paths discussed in this chapter. Neither of these paths solves the SSAC crises. The Marxist path introduced the first view of development, which looked to control industrial production in favor of workers. The leftist path had some success during the Cold War era. It received a sympathetic reaction in many Third World countries, especially in the 1950s during the domination of the former Soviet Union. However, this success disappeared with the collapse of the Soviet Union and its allies. The second development path was introduced by the United States and its allies. Their policy was basically that, in order to eliminate poverty, the market system had to be honored. The US government and its allies’ efforts to fight Socialism resulted in the introduction of foreign aid through bilateral and multilateral agencies such as The World Bank. 105The outcome of the Western economic policy through development assistance has increase debt in SSACs and created what is known as HIPCs (highly-indebted poor countries). Sub-Saharan African countries need a comprehensive change in their ‘economic and political sectors. What SSACs also need is comprehensive economic aid and democracy in the region, which will have a tremendous impact on the people as well as on the country. African countries need strong policies, the same as those Keynes described in post-World War II practices of state intervention in the economy. They need a “Marshall Plan.” This plan would be a model for ideas in economic aid. African countries need a hard-push model like the Marshall Plan to move them away from this bottleneck. They need help from rich, industrialized countries so that they can break the vicious circle and move toward modernization. Yet this help must be directed to development without exercising power over the LDCs in general and the SSACS in particular by multilateral institutions supported by Western countries. Foreign aid, as discussed in this chapter, can be viewed as a tool to exercise power by the donor country with little relevance to, and possibly negative consequences for, the development of recipient countries. From what has been discussed, one can draw the clear conclusion that industrial countries’ foreign aid has caused serious economic, political, and social problems in recipient countries. Poor African countries depend heavily on such aid, e.g., Guinea-Bissau and Gambia, where 89.3% and 55.6%, respectively, of their GNP is aid. What makes the problem even worse is that most of the aid is consumption aid, such as food or political aid such as military assistance. Thus, Western foreign aid seems to have contributed to African poverty, which has caused African countries to suffer from debt and a high 106dependency on outsiders. Debt forgiveness involves reducing a large part of the borrowed money to a creditor. By implication, debt forgiveness constitutes a considerable amount of resources that would have been spent on servicing the debt. African countries’ debt is highly relative to the size of their economies and will remain a very important obstacle to their future growth. Therefore, a new path of development assistance has to be given a chance. Development assistance, which does not depend on socialist or Western capitalist ideology, must then come from a middle, non-superpower state. Saudi Arabia's development assistance goes to LDCs located in the southern, undeveloped hemisphere. Chapter IV describes Saudi development assistance through bilateral and multilateral agencies. It is meant to analyze how a Third World country, Saudi Arabia, can implement its programs. As a LDC itself, Saudi Arabia’s assistance components are basically to offer Islamic and development assistance. Because Saudi Arabia is considered a peripheral Third World country, it means that Saudi foreign aid is not meant to procure goods and services from recipient countries, but welfare of the Islamic belief, without procurement strings attached to it. 107CHAPTER IV. SAUDI DEVELOPMENT ASSISTANCE THROUGH BILATERAL AND MULTILATERAL INSTITUTIONS troduction: Previous chapters discussed in detail the crises of poverty in SSACs. They explained how industrial countries to some extent give aid to middle- and high-income countries based on commercial and strategic interests rather than to assist the poor. The World Bank Report 1990 reveals, for example, that in 1986, only 8% of US aid ‘went to low-income countries. This is true for many other Western donor countries as well, such as France and Britain. Developing countries currently have a common goal of striving to achieve global economic and social development to raise the standard of living of their people and to maintain sustainable growth. However, the realization of economic progress is dependent on the availability of each country’s economic resources and its ability to use its resources to achieve the goals of global economic development. Moreover, due to the great disparity among the countries of the world as to the size of their natural, human, and physical resources, development assistance has been a vital ingredient contributing to strengthening the ties of solidarity among various peoples. Therefore, because of Saudi Arabia’s awareness of the dire economic and social difficulties encountered by developing countries, Saudi Arabia has consistently cooperated with different nations to provide assistance to African countries through various channels and forms. ‘Saudi officials as well as the Saudi people have extended their hand and set up an economic program with donations, grants, and soft loans through bilateral channels 108to underdeveloped countries. Loan agreements to SSACs, among them Mali, Chad, Guinea, and Eritrea, in 1995 exceeded US$83 million. These amounts went to development projects aimed at alleviating poverty through irrigation, rural development and agricultural projects, and power generation and transmission plants (Saudi Fund for Development Annual Report 1995:11). According to the Saudi philosophy, Saudi development and cultural assistance must be linked to the people's needs and have a particular objective, such as alleviating poverty, educating people, or improving the country’s economic situation. Saudi economic assistance programs are both large and extensive in terms of their recipients. Their origins, evolution, mechanism of financial aid, and characteristics are not widely known, even in the Kingdom itself, Saudi economic assistance increased sharply and took on a new design in 1973-1974 due to the oil price correction. It increased again in 1979-1980 owing to additional oil price increases. These two periods challenged the Saudis to create new channels to help developing countries in their economic crises, especially SSACs. The rapid growth of a monetary surplus in the Kingdom and interest in positioning itself among the LDCs persuaded the government to create national financial institutions such as the SFD (Saudi Fund for Development). The role of the SFD in the development of SSACs will be discussed in more detail later. Nyang (1982:11) states that the SFD, as the most important financial aid institution in the Muslim world today, was begun to help African states in the early 1970s, Aftican countries then began to pay more attention to Arab countries, especially after the establishment of OPEC. OPEC reports that in the period from 1091973 to 1989, Saudi Arabia gave more than US$24.683 billion in economic assistance (Alvazirah 6788, 1990). There were political reasons for the economic aid as well as humanitarian purposes. Sylvester (1981:195) points out that Saudis gave out more aid than any other country in the world, Arab countries contributed 10% of their oil revenues, whereas industrial countries did not even measure up to the 0.07% suggested by the United Nations. The Arab Bank for Development in Africa (BADEA) is another Arab institution whose main objective is development, not profit. BADEA’s goals are to help the infrastructures of sub-Saharan countries. Over the last two decades, BADEA. has funded projects for more than US$45.6 million. One of the key members of BADEA is Saudi Arabia. The last two projects approved by BADEA were worth ‘more than US$40 million. One was to Mauritius to build dams, and the second was to ‘Swaziland to build highways (4/-Jazirah, newspaper articles, Riyadh, Saudi Arabia, October 8, 1998; http \\worw.aljazirah com/1998/oct/efi/p.24 hth) Recently, BADEA agreed to provide grants to African countries, including USS thousand to Rwanda to provide medical supplies, US$72 thousand to Somalia for children’s vaccines, US$1.333 million to build Islamic schools and vocational training centers for Muslims in Ethiopia, and US$6.4 million in loans to Senegal BADEA is strongly encouraging other countries to provide assistance according to the slogan “trade instead of aid to Africa.” The Arab Bank urges countries around the world and members of the Islamic Conference, in particular, to do business with Africa. It was one of the active contributors of the “Africa Connect” Conference held in Midrand, Johannesburg, South Africa in 1995, which attracted 500 participants 110from Africa, Asia, Europe, and North America, as well as various intergovernmental organizations (Alamanar 1997:6-21). According to the Ministry of Finance, Saudi Arabia has contributed to a number of international programs specializing in development and alleviation of poverty in Africa. Among them is World Food Programs, where foodstuffs are provided to the needy all over the world. Official indicators show that 50% of the resources go to Africa. The World Program for Combating River Blindness, to which the Kingdom contributed 8.36% of its total to recipient countries, focuses on West African countries, namely Ghana, Ivory Coast, Mali, Niger, Togo, and Burkina Faso. In addition, Saudi Arabia is a key player in the UN High Commission for Refugee Affairs. The Kingdom donated US$28 million at the first conference in 1981 to assist African countries and US$4.6 million at the second conference in 1988. This is in addition to its contributions to the Arab Gulf programs for development of UN organizations. Saudi Arabia and its sister Arab Gulf nations established this program to support UN humanitarian efforts. Saudi Arabia has provided 76% of the program’s resources for The World Bank and IMF programs to assist SSACs and in support of structural adjustment (Ministry of Finance 1991:18-19) (Table 6). Saudi Arabia is also active in many multilateral organizations, including UNICEF, WHO, FAO, WLO, WEP, and UNESCO. In absolute terms, Saudi Arabia ranks second to the United States in contributions (Simmons 1981:58). Saudi Arabia is a major contributor to the United Nations Development Program (UNDP). In the core budget of the UNDP in 1996, Saudi Arabia pledged USS2 million to its poverty reduction program (UNDP Annual Report 1996/1997). MmTable 6 jbutions to Arab ment ‘Saudi Arabia Institution Saudi Arabia | Contribution (in USS | Contribution | _ of Total millions) | (in USS millions) | Institution Tslamic Bank for Development (IDB) Ze 336.440 “Arab Fund for Economic and Social 2,415.9 353.0 29 Development (AFESD) ‘Arab Monetary Fund (AMF) 7,294.0 1873 145 ‘OPEC Fund for International 3,435.0 ¥7,033.3 30.1 Development (OPEC) ‘Arab Bank for Economic Development T0488 2556 244 in Africa (ABEDA) ‘African Development Bank (ADB) 59315 143 025 “The World Bank (WB) 96,600.0 3,032.8 33, International Development Agency 40,927.0 1,665.7 35) (DA) International Finance Corporation (IFC) 1,300.0, 179 14 Mutual Investment Guarantee Agency 1,000.0 314 31 (MIGA) ‘The International Monetary Fund (IMF) | _116,983.8 4165.1 36 ‘African Development Fund (ADF) 3,499.9 116.5 34 Intemational Fund for Agricultural 2,340.9 333.8 143 Development (OFAD) ‘Arab Corporation for investment 25.0 38 15.0 Guarantee (ACIG) ‘Arab Gulf Program for Support of UN 197.0 150.0 760 Development Organizations (AGPSUNDO) ‘Arab Fund for Technical aid to Arab and 0.1 136 226 African Countries (AFTAAAS) Funds and institutions established under NA a7 NA the Organizations of the Islamic Conference (FIC) Program for Curing River Blindness 299.0 25.0 84 (PCRB) Program for Combating Drought in the Sahel Countries (PSD) 240.0 $21,300,000 of which has been allocated as a contribution to the IMF's Trust Fund. Source: The Kingdom of Saudi Arabia Economic and Social Development Aid to the Islamic World (@nd E4.). Riyadh, Saudi Arabia, 1991. u2This chapter is not intended to cover all the objectives and aspects of Saudi economic assistance to the SSACs. This section illustrates and analyzes only part of Saudi Arabia's economic assistance to SSACs by specifically focusing on the significance of Saudi economic assistance through bilateral institutions, such as the SED. Since there are very limited sources written about Saudi development projects by the SFD in SSACs, this work will heavily depend on internal documents and reports obtained from the Saudi Fund for Development and the Ministry of Finance. This chapter also discusses the role of Saudi economic assistance through multilateral institutions such as the OPEC Fund for International Development, BADEA, and Saudi Arabian citizens’ contributions to African famine, drought, and flood crises. Saudi Fund for Development Since the mid-1970s, Saudi Arabia has been a leading donor in terms of overseas development volume and ODA/GNP ratio (The World Bank Aug. 1988). Poor countries have no alternative other than to depend on other countries. LDCs depend mainly on the international public sector for loans, since their interest charges and conditions are lower than those of commercial banks (David 1997:200-12). The SFD is considered to be one of the major contributors to African national development. In 1996, it approved 35 projects in 15 African countries for USS90.35 million, which was 45.53% of the total loans given out in that year (SFD Annual Report 1996). Saudi Arabia is enthusiastic when it comes to participating in any efforts intended to help improve the social and economic conditions of African countries, in ‘order to achieve prosperity on the continent. The SFD has helped SSACs with 113,infrastructure, education, health, water supplies, energy, and agriculture. Figure 6 shows that, between 1975 and 1997, SSACs received 63% of the geographic distribution of Saudi foreign assistance, with 37% going to North Africa (Saudi Fund for Development, 12-3). North Aftica 3% ‘Sub-Saharan countries 63% Figure 6. Distribution of SFD Funds on Sour: Saudi eee Coat ent ais ‘in Africa, ‘Riyadh, Saudi Arabia: Al Frazdag Press, 1992). ‘Saudi Arabia is also a major contributor to Arab regional and international development institutions (Ministry of Finance:18-9). Saudi Arabia has a strong influence in many financial institutions and Arab countries because it is a big contributor to the development banks. For example, Saudi contributions to the Arab Gulf Program for Support of UN Development Organizations amounts to 76%, and to the Program for Combating Drought in the Sahel Countries it amounts to 54%. As a consequence, Saudi Arabia has voting power and great influence over the countries in these organizations. ‘The SFD was chartered by Royal Decree in Sha'ban 1394 AH (September 1974) and commenced operations on 18 Safar 1395 AH (March 1, 1975). The objective of the SFD is to participate in the financing of development projects in developing countries through loans. The emphasis is on development projects that promote the social and economic well being of people in low-income countries and LDCs. The SFD is totally funded by the Saudi government. The initial authorized capital was US$2.6 billion in 1974. The SFD ceiling was raised three times, from naUS$4.4 billion to US$6.6 billion. In 1991, it was raised again to US$8.2 billion. SFD activities have no geographic or sector limitations. The SFD deals directly with the governments of African countries, and the assistance is provided for development projects only. However, the SFD has several conditions that must be fulfilled by the receiving country. These conditions include that: 1. The project to be financed must contribute to the economic and social well being of the borrowing country; 2. The loan be repaid in Saudi riyals; 3. The amount of the loan granted to any project not exceed 5% of the total capital of the SFD, and not exceed 50% of the total cost of the project for which the loan is granted; and 4. The total amount of loans granted to any one country not exceed 10% of SFD capital at any one time (SFD Charter 1974). These conditions show that the SFD is trying to spread its funds to benefit needy countries, avoiding concentration in any one country, and is directed at the social development of the people in the recipient country. Also, by having such conditions, the SFD encourages the borrowing country to have more responsibility by participating in the project’s capital, either with local funds or from outside sources. During fiscal year 1418 AH (1997), disbursements amounted to USS194.3 million, which supported 64 development projects and economic programs in 27 countries. In terms of geographic distribution of disbursements in fiscal year 1997, Table 7 shows that 15 African countries received US$78.42 million or 40.4% of the total disbursements, for 35 development projects. The SFD’s geographic distribution 1sof disbursements during fiscal 1997 shows that the SFD emphasized financing development projects in low-income countries, such as in Africa, and in the densely populated countries in Southeast Asia (Table 7). Even though Arab countries such as Lebanon, Jordan, Iraq, Yemen, and Bahrain, having a good relationship with Saudi Arabia, are located in Asia, Africa outnumbers them in number of projects and recipient countries. More African countries benefited from SFD loans than Arab countries located in Asia. Table 7 hic Distribution of Disbursem: 997 (in USS millions) No. of ‘Amount of Disbursement 110.4 56.8 78.4 40.4 55 28 194.3 100.0 ‘Source: Saudi Funds and Economic Development in Africa. (Riyadh, Saudi Arabia: ‘Al Frazdaq Press, 1998). Disbursements were based on a number of factors, such as the nature of the project, declaration of loan effectiveness, and progress in project implementation. A general view of disbursements shows that the energy sector received US$23.3 million, representing 44.8%, to implement seven power generation and transmission projects (Table 8). In the social infrastructure sector, which includes housing and urban development, potable water and sewage, health, and education, loans amounted to USS10.9 million or 19.7%, with 14 projects in nine African countries. In addition to investment in the energy sector, education and agriculture were given special attention because they have direct effects on poor people. Most schools and clinics were built 116in areas where great poverty exists. There is great attention given to education to meet the rapid growth in enrollment, especially in primary education, due to the increase in African population. In the agricultural and rural development sector, disbursements amounted to US$37.6 million, or 19.3% of the total, of which USS21.6 million went to implement eight projects in seven African countries. Table 8 istributis i ments, 1975-1997 r (Ga USS millions) ‘Amount ‘As Percentage of Total Energy Social infrastructure A Housing/Urban Development 21.9 B Water Supply/Sewage 79 C Health 45 D Education 37 Agriculture/Rural Development ‘Transportation/Communications A Roads 22.1 B_ Railways 1.0 C Airports 0.6 D_ Seaports 03 Industry/Mining Multi-sectors ‘Source: Saudi Funds and Economic Development in Africa, (Riyadh, Saudi Arabia: Al Frazdaq Press, 1998). The agricultural and rural development projects were managed by The World Bank. It is part of the cooperation between the government of Saudi Arabia and The World Bank to eliminate poverty in rural areas. In the transportation and communications sector, the SFD spent US$24.4 million (12.4%), of which US$9.8 »n went to implement eight projects in seven African countries, Investment in 117energy (44.8%) and social infrastructure (19.7) has a direct impact on poor people to promote their individual development and give them the ability to escape poverty. The SFD gives due consideration to the support of low-income countries in their efforts to combat poverty and develop different economic sectors. SEDs activities during the period 1975-1997 show that the Kingdom realized the merits of cooperation and solidarity between the governments of Saudi Arabia and developing countries. The Kingdom has continued to provide its assistance to these countries to enhance their endeavors and to accelerate their development process. Since funding is coming from a Southern; less-developed country, the Kingdom's loans are characterized as “untied,” unlike loans from most other donors. The foreign aid given by industrialized countries usually is tied to procuring goods and services from their ‘own markets. It is worth noting that aid given by Saudi Arabia has helped increase the demand for Western products and services because most of the companies who work ‘on Saudi projects in SSACs are Western companies. During the period 1975-1997, 63 countries received funds totaling about US$4.73 billion, representing 82.8% of SFD’s cumulative loans of US$5.72 billion to finance 305 development projects and/or economic programs (Figure 7). No. of Countries No. of No. of Total Total Amount Disbursement Receiving Loans Agreements jects) © Amount of of as %age of aed Program Loans Disbursement, Loans, 63 315" 305* 3.7 47 82.75 Figure 7. Saudi Funds for Development Cumulative Disbursements, 1975-1997 (Go US$ mations) *Separate loan agreements were signed for additional loans for the same projects, hence the difference between number of loan agreements and number of projects/ programs. ins Saudi Funds and Economic Development in Africa. (Riyadh, Saudi Arabia: Al Frazdaq Press, 1 1gDisbursement is related to a number of factors, such as effectiveness of the loans, political stability, and availability of local counterpart funds. ‘The average size of project disbursements depends on the level of economic development and the absorptive capacity, as well as on the level of technical ability of the recipient country. The SFD disbursed US$2.202 billion in the period 1975-1997 to 39 countries in Africa, representing 83.3% of the SFD’s total loans in Africa, for 180 projects/programs. Table 10 shows that the SFD implemented only 119 projects in 19 Asian countries, which includes Arab countries, whereas in Aftica, more countries (39) and more developmental projects have been implemented (Table 9). This is what development means that the development disbursement should be to smalll projects so more people can benefit. Even though there are neighboring Arab countries such as Jordan and Yemen located in Asia, Africa gets more in percentage terms of disbursements. Table 9 raphi of ind for Devel Disbursements, 1975-1997 Geographic No. of No. of Total Disbursement Zones Countries Projects’) Amountof —_as “age of ‘Source: Saudi Funds and Economic Development in Africa. (Riyadh, Saudi Arabia: ‘Al Frazdaq Press, 1999) ugdisbursements. The The SFD gives great attention to sector distribution i SFD supports the development process in a number of LDCs by providing soft loans for financing development projects and/or economic programs that are accorded high priority in the development plans of the recipient country. In addition, the SFD gives due consideration to shortages in financing current projects that it has already contributed to by allocating additional loans. The nature of the project affects the resource inflow. For example, energy projects require high capital costs; therefore, there is a drain in a short period of time, ranging from one to three years. With regard to sector distribution in Africa, the transportation and communications sector received the largest share of disbursements, with 63 projects in the amount of US$809.57 million, A number of projects in all of the energy sectors, social infrastructure, agriculture/rural development, transportation/communications, and industry/mining are covered by the SFD. Statistics for developmental projects in Kenya on the East, Coast of Africa, will be discussed and then selective developmental projects in SSACS, such as projects in Senegal on the West Coast, a member of the Organization of the Islamic Conference with a high Muslim population, as well as Mali. Senegal’s former President, Abdu Diouf, built good relations with the government of Saudi Arabia and with its religious leaders, especially the scholars, by giving them permission to open an office to promote Islam (Dar Aeffia) in all countries located in the westem part of Aftica. Some selected projects implemented in Mali will be presented. The majority of the people in Mali are Muslims, and poverty is widespread in the country. 120Saudi Fund for Development Projects in Kenya Saudi Arabia and Kenya have had a strong political and economic relationship since the early 1960s. Kenya, like most African countries, has asked the world's countries to provide development assistance, and Saudi Arabia was the first to help. Africans south of the Sahara in general, and Kenyans in particular, do not have the basic necessities of food or health, so Saudi Arabia has tried to support the country financially and morally (Islamically). The emphasis here will be on the amounts spent on projects with an analysis of some of them. These countries were chosen because Saudi Arabia has a solid relationship with them and they have the potential for development. The case of Kenya changed after the US Embassy bombing in 1997, for which the US accused ex-Saudi citizen Usamah Bin Laden. Kenya asked Saudi Arabia to eliminate its financial and cultural assistance to Kenyan Muslims and to close Saudi Islamic centers. This step by the Kenyan government affected diplomatic relations between the two governments to the extent that it led Saudi Arabia to recall its ambassador. The Saudi Embassy remained closed until 2001, when Saudi Arabia sent a new Ambassador to the country. The first project in Kenya in 1975 was for potable water to be supplied to Nairobi. This project was to establish a network of drinking water sites around Nairobi, including the necessary work to provide water pumps and huge water tanks. The project was co-financed with The World Bank (USS3 million) and the OPEC Fund (USSS.5 million). The government of Kenya provided US$32.4 million. SFD policy is to concentrate on projects that will have a direct effect on people's lives, such as water supply and agriculture, because they help a large portion 121of poor people. Poverty in SSACs spreads to rural areas; therefore, the SFD puts more money and emphasis on this sector to eliminate poverty among villagers. The difference between the amount of a loan and the amount withdrawn is those funds Utilized to fund another developmental project if the Saudi government agrees. This depends on several factors, including developmental, political, and cultural. The Saudi government will re-examine these factors; and accordingly, the remaining amount will be re-invested in the country. The head of the SFD is the Minister of Finance and National Economy, who is a member of the Council of Ministers, ruled by the King. Therefore, any change in agreed-on projects has to be approved by the Council of Ministers to review whether it has political, developmental, and/or cultural objectives. For example, the government of Saudi Arabia agreed to use the surplus money of the Nairobi water project, US$8.37 million, to implement the Garissa urban water supply project. The government of Saudi Arabia tries to help poor African Muslims, and in the Garissa area nearly 100% of the population is Muslim. It is a fast- growing town that needs an adequate, reliable water supply to meet its present and future demands. Another political objective behind this approval was to smooth over the relationship between the two countries after the US Embassy bombing, Garissa's urban water supply project is a water pumping project whose source is the River Tana, and it is intended to provide an additional 19,000 cubic meters a day of treated water to the Garissa Township. The aim is to reduce the frequent water shortages being experienced by the township. The implementation of the project commenced in 1991 and progressed well until January 1995, when, due to unavoidable circumstances, the Kenya Ministry of Land Reclamation Regional and 122Water Development was forced to terminate the project. According to the Ministry of Land Reclamation Regional and Water Development, the original objectives of the project were to build: 1. Pumping intake works on the Tana River, for one to five miles (8 km), with a 350 mm diameter raw water rising main, and 19,000 square meters a day water treatment works; 2. Ground water storage reservoirs; 3. Lowland type residential houses; 4, A distribution pipeline of varying sizes; 5. A total of 4 miles with a 100-m diameter distribution pipeline to the Madogo center; and 6. Anadministration building and laboratory. In 1986, the SFD also funded the agricultural sector in Kenya in the amount of USS4 million, of which the full amount was drawn according to Agreement No. 280/6 signed by the vice-chairman of the SFD and managing director on 15/5/1408 AH (April 1, 1988) (SED Memoranda 1999) (Table 10). ‘The aim of this project was to develop the agricultural sector and solve some of the problems facing this sector, such as roads and pesticides in plants. The SFD has a special program called the sub- Saharan program, in which the SFD contributes directly to African countries. The SFD paid US$4.0 million in cash to the Kenyan government to finance this agricultural project with The World Bank. The World Bank then managed and implemented the project. This project was co-financed between the SFD and The World Bank and was completed on July 31, 1989. Additionally, the project aimed to 123overcome a number of problems in the agricultural sector within the framework of an agricultural sector adjustment program, which is being executed by the borrower with the collaboration of The World Bank. The project consists of the following parts: 1. Provision of petroleum products, and 2 Provision of agricultural equipment and machinery, including bulldozers, tractors, trucks, pumps, generators, and spare parts. In 1989 a second project in Kenya was the Kembiri Dam. This project was to generate electricity by building a dam on the Tana River about 100 meters high to generate 140 megawatts of power. The project mainly involved construction on the Tana River, some 22 miles downstream of the existing hydroelectric power stations at Kindaruma, the Kiambere Dam. Table 10 D ntal Projects Financed/Co-Fis eS) ‘Kenya, 1975-1995 ‘Name of Project/ ‘Amount of _ Amount % Loan Number loans Withdrawn Completed (USS million) Nairobi water - 76/1 Kenya-Sudan Road ~ 120/2 Thika-Garissa-Luboy - 135/3 Mombasa water/sewage - 156/4 Kembiri Dam for electrical generation — 199/5 Agriculture — 280/6 Kembiri Dam for electrical generation (phase) - 1122/5 Total ‘Source: Saudi Funds and Economic Development in Africa. (Riyadh, Saudi ‘Arabia: Al Frazdag Press, 1999). 124The Kembiri project was comprised of the following parts: ih Preliminary work, including an existing camp at Kamburu and a new camp at Kiambere, a 22 mile long access road connecting the site of the Kangodi to the Embu government road and a gravel surface airfield suitable for light aircraft at Kiambere. 2 Construction of an earthen-filled dam about one mile long. 3. Construction of an intake structure, headrace tunnel (including surge chamber) and pressure shaft and penstocks, power house, service shaft, tailrace, and control building; 4. Supply, installation and commissioning of gates valves, screens and associated equipment for the intake, penstock tailrace, and diversion tunnels. 5. Supply, installation, and commission of generators, sets, etc. The SFD share of this project was US$10.66 million, of which US$10.32 was withdrawn, The total amount of this project was USS347 million. It began on January 19, 1984, and was completed by October 14, 1988. It was co-financed with several development and government agencies and banks (Table 11). In fiscal year 1980, the SFD approved a loan for USS9.23 million to construct a road between Kenya and Sudan, co-financed with BADEA (US$10.00 million). The road connects the Republic of Kenya with the border of Sudan. Agreement No. 120/2 was signed on 15/10/1400 AH (August 26, 1980). Kenya provided US$0.5 million to complete the project, and the project began on April 11, 1984, finishing on December 12515, 1988, The objective of this project was to open a road 260 km (162.5 miles) long, with two lanes of asphalt and shoulders on both sides. Table 11 Fir i in biri Dam Proj Kenya, 1984-1988 ‘Amount Gn millions) African Bank for Development uss21.7 The International World Bank for Reconstruction uss9s and Development German Bank for Construction DM39 England Agency for Overseas Development STGI23 Swedish International Development SEK37 Canadian Agency for Country Development cDsso ‘Yugoslavia Bank for Intemational Economic ussi1.4 Development ‘Source: Saudi Funds and Economic Development in Africa. (Riyadh, Saudi ‘Arabia: Al Frazdaq Press, 1996) Saudi Fund for Development Projects in Mali The SFD has been providing loans and funds to Mali since SFD’s establishment in 1975. These contributions reached a peak in the 1980s when the SED and other agencies financed a variety of developmental projects. In 1976, the SFD provided loans to Mali for housing and urban development for USS 4.40 million (Table 12). The project was finished in 1979. The objectives of another project were to build a dam on the Sankarany River, one of the Niger River's tributaries, which would generate electricity, provide agriculture, and develop fisheries. Work on this project was completed in 1982 126Table 12 q Mali, 1975-1997 ‘Housing/urban development 4.40 Salangy Dam 14.13 Agriculture and rural development 12.49 Sifar-Gaw Road 8.97 Sifar-Gaw Road (2) 4.46 Salangy Dam (2) 1.64 Development of the Senegal River 50.56 The Institute of Arabic Language and Islamic. 18 Knowledge Consultant fees for the second bridge in Bamako 1.60 Fund the public sector 5.86 Second bridge in Bamako 20.16 Second bridge in Bamako (2) 16.36 Fund economic development 1.86 Agriculture/rural development in the 6" province 3.73 Second cement factory 13.33, Total__159,225.52 ‘Source: Saudi Funds and Economic Development in Africa. (Riyadh, Saudi ‘Arabia: Al Frazdaq Press, 1998). Another project the SFD supported is the Islamic and Arabic Institute co- financed with the IDB. Saudi Arabia tries to promote Islam and teach Muslims Arabic and Islamic knowledge. The Islamic and Arabic Institute graduates instructors who teach the background of Islam, so that, in turn, others can teach Islamic studies in the schools. Another objective of this project is to enhance Islamic and Arabic culture in West Africa. Government officials from West Africa, who went to Makkah, Saudi Arabia, to celebrate the 15th centennial anniversary of the Muslim calendar in 1982, welcomed the aims of this project. The SFD provided US$1.866 million, with the IDB providing the balance (USS1.8 million). The Salangy Dam development project ‘was co-financed by the SFD with many lateral and multilateral institutions (Table 13). 127Table 13, Financial Investors in the Salangy Dam on the Sankarany River, M: @lectricity, Irrigation, and Fishing) Institution ‘Saudi Fund for Development (SFD) USSI6.2 Arab Bank for Economic Development in Africa (BADEA) USSI5.0 Abu Dhabi Fund for Development in Arabic Countries UDRI6.0 Kuwait Fund for Developmental in Arabic Countries KDS.0 African Development Bank ACUS.0 European Fund for Development ECU26.2 French Center for Economic Development FFR41.2 French Fund for Development Projects FFR24.1 German Bank for Development DM35.0 Republic of France FFRI4.0 ‘Source: Saudi Funds and Economie Development in Africa. (Riyadh, Saudi ‘Arabia: Al Frazdaq Press, 1995), Saudi Fund for Development Projects in Senegal Saudi Arabia and Senegal have a solid political and economical relationship. Saudi Arabia supports Senegal financially through the SFD. Most of the projects in ‘Senegal are financed by the SFD, unlike other projects, where the SFD is mainly a co- financing partner. For example, the Dakar-Thies road project was fully financed by the SFD for US$33.50 million in 1982 and a second project fully financed by the SED was the development of the Anaby River for USS8 million. The objectives of the Anaby River project were to develop approximately 100 hectares (247 acres) to produce rice and beans and to construct a canal along the Anaby River (Table 14). 128Table 14 Fi SED in I, 1975-1997 ‘Name of Project Dakar-Thies Road Anaby River phase Develop Senegal River Kadigo-Sarya Road Completion and maintenance of Orossogy-Bakeel Road Development of primitive society on Senegal Consultant fees for Yalkoto-Kedego 55 Provide equipment to the countryside 28 Front Doter Canal in Dakar 2.14 ‘Support economic sector 5.86 ‘Support economic and social sectors 213 Dyalakoto-Keudoogo Road 10.40 Develop Anaby River 15.21 Expansion of electrical generator on Kabdo Beach 24.00 ‘Support education sector 6.95 ‘Support agriculture sector 12.00 ‘Support health sector 4.53 Total ___217.09 ‘Source: Saudi Funds and Economic Development in Arica (Riyadh, Saudi ‘Arabia: Al Frazdagq Press, 199 BADEA Annual Report 1999). The objectives were to support and develop the Senegal River and provide water for irrigation of more than 375,000 hectares (926,250 acres) to the countries along the river. The project also generates electricity to the countries benefiting from the project. The SED also co-financed several projects for the development of the Senegal River at US$63.22 million, with several multilateral institutions (Table 15), 129In fiscal year 1997, the SFD signed loans for US$12 million to develop agriculture reclamation land in Senegal. This was co-financed with The World Bank (US$6.8 million) and BADEAs US$12.2 million. The objective of these projects was to increase agriculture production, thereby contributing to a reduction of poverty, particularly in rural areas. The aim of the projects was to increase irrigation of agricultural lands along the left bank of the Senegal River, from the city of Saint Louis to the border of Mali, by pumping water through open canals. The project covers work in the Dagana and the Nidierba regions. This loan has a 20-year repayment term, including a five-year grace period suggested by OECD. The agreement was dated 18/1417 AH (January 27, 1997), and the implementing agency is a national company for the management and exploration of the Senegal River delta. (SFD Annual Reports 1990-1997). Table 15 Financial Partners in Senegal River Development Projects, 1997 Saudi Fund for Development USS63.22 Islamic Development Bank Uss4.95 Abu Dhabi Fund for Economic Assistance to UDR259 Arab Economies Kuwaiti Fund to Develop Arab Countries KD28.6 OPEC Fund for International Development USS6.20 France Monetary Fund for Economic Assistance AUS226 GM150.8 Sours: Saudi Puna and Economic Development Aico vad Saud ‘Arabia: Al Frazdaq Press, 1997). 130Saudi Fund for Development Projects in Sahel Countries The government of Saudi Arabia established a program for combating drought in SSACs for USS34.66 billion. The SFD is totally responsible for this program. The first phase of this program was from August 1984 to June 1988 (46 months) for US$100 million. The SFD used USS19 million as an emergency fund to fight hunger, providing food to the Sahel countries because of the poverty facing the people in these countries. The SFD allocated US$30 million in the second phase, September 1988 to June 1991 (21 months) (Table 16). Table 16 ‘SED Programs for Digging Wells and Development in the Sahel Countries, 1984-1991 ‘Number of Wells Country Amount | (Phase Land 11) Mali Chad Senegal Niger Guinea Burkina Faso Gambia Guinea Bissau Cape Verde Total * Tn addition, to build two small dams to restore water to a capacity of 1.23 million square meters. ** In addition, to make the necessary pipelines to different areas. ‘Source: Saudi Funds and Economic Development in Africa. (Riyadh, Saudi Arabia: Al Frazdaq Press, 1997), 131The total expense of digging wells is different from one country to another, depending on the geographical location. For example, safety is a major concen for the SFD; thus they try to avoid areas where clashes and civil war are ongoing. Therefore, the cost of digging 100 wells in Mali is different from the cost of digging the same 100 wells in Chad. Also, the SFD projects are not only for the expenses of water plants—they might include building water tanks as well (steel, cement, or fiberglass). According to SFD officials, all water tanks that the SFD builds are of concrete (SFD Memoranda). The objectives of these projects were to provide drinking water to the people of the Sahel countries as well as to fight poverty in that part of Africa. The SFD also represented the government of Saudi Arabia in the third phase (1990-present, overlapping the second phase) of combating drought in the Sahel region. The SFD allocated US$5O million to dig more than 1,100 wells. This number is an estimate and is subject to change since the program is still ongoing. The general contractor of the program is the German technical company Gesellschaft fiir Technische Zusammenarbeit (GTZ), as it was for the first and second phases. The SFD also announced several additional projects in the Sahel countries in the third phase, including one in Senegal, where the project is to take about 24 months to dig 30 wells—15 deep wells—in the cities of Tambacounda, Koundare, and Velingara, combined with the necessary pipelines, large storage tanks, and electrical generators. In the third phase, the SFD requires that GTZ train local citizens to run the machinery themselves without depending on a foreign company after the project is completed. This also allows the population to learn what to expect from such a project and what 132the benefits of the program are. (Ash-Sharq Al-Awsat 7444, Friday, May 16, 1999:15). The first country in the third phase will be Mali, with GTZ the consulting firm. The aim of these projects, located in the Segou, Mopti, Timbuktu, and Gao provinces, is to dig 310 deep wells costing USS6 million, including all necessary ‘equipment such as pipes, electricity, generators, and vocational training for the local population (4sh-Sharg Al-Awsat 7518, Tuesday, June 29, 1999:12) It is worth mentioning that, in all three phases of the SFD projects of digging wells in the Sahel countries, non-Muslims benefited from these projects as well. Cape Verde is not a Muslim country—99% of the population are not Muslims. Yet the wells funded by SFD total about 1,200 for more than US$17 million Saudi development assistance reaches all developing countries, especially SSACs. In the period 1970-1990, the Kingdom of Saudi Arabia provided approximately USS60 billion, about 64% of total foreign aid provided by all Arab countries. The SFD is considered the most significant Arab fund to LDCs (Attawan 1995), Organization of Petroleum Exporting Countries Fund for International Development Bilateral and multilateral institutions have been the major contributors of foreign aid in the past two decades. As mentioned earlier, foreign aid reached its peak during the oil embargo in 1973, when oil producers led by the Organization of Petroleum Exporting Countries (OPEC) raised the price of oil. Mittelman and Pasha (1998) state that the oil price explosion is considered an important move because it shifted the controlling power of the energy market from Western companies (mainly the US), such as the seven sisters—Exxon, Gulf, Texaco, Mobil, Socal, British 133Petroleum, and Shell—to the OPEC countries. The OPEC countries eliminated the monopoly and nullified the political power of Western countries, at least at that time, and began controlling the supply of oil in the international market. This move had a significant impact on the price of energy. As a result, the price went from $1 a barrel at the beginning of 1970 to about $45 by the end of 1970, which contributed to the national budgets of OPEC members and created a money surplus. These countries, due to their small market, relative to the Western market, decided to invest and deposit their excess revenues in Western countries, as well as raise their share in multilateral institutions such as The World Bank, IMF, and the United Nations. Thus, this surplus in the market has contributed to increased foreign aid. On the other hand, the price of oil and petroleum-based products has increased the African countries’ external debts and deepened economic crises. Therefore, one of the OPEC Fund's economic assistance programs is to help poor African countries reduce their oil bills by providing cheap oil as a grant. ‘The OPEC Fund for Intemational Development is one of the more important instruments of OPEC as it provides economic assistance to developing countries in general and to SSACS in particular. It has provided assistance and grants to more than 90 countries, totaling approximately USS4.16 billion (OPEC Fund for International Development, Annual Report 1993). The OPEC Fund was established in 1976 to provide financial assistance to LDC governments, excluding member countries and international financial agencies. It gives priority to poor countries and to projects aimed at alleviating poverty. The OPEC Fund makes several types of loans, such as loans directed toward development projects and loans directed toward budget deficits, 134concentrating on LDCs and low-income countries, specifically SSACs. In addition, the OPEC Fund pro technical assistance, emergency assistance, and food assistance for poor people. Some of the SSACs that have benefited from the OPEC Fund include Burkina Faso, Burundi, Chad, Guinea, Lesotho, Mali, Niger, Senegal, and Tanzania (OPEC Fund for International Development, Annual Report 1994) Figure 8 shows that SSACs receive great attention from oil producers to reduce the effect of the increase in oil prices. Also, it shows that OPEC Fund disbursements are based on people's needs regardless of political motivations. ‘Sub-Saharan African Total Funds Countr (in USS millions) ‘Angola Benin Botswana Burkina Faso Burundi ‘Congo Gambia Kenya Mozambique Sierra Leone Zaire Zimbabwe Figure 5 Disuibwtion of ike OPEC Fund throw; 993} Source: OPEC Fund for Intemational Development, Annual Report 1995. Despite the fact that most of OPEC Fund members are either Arab or Islamic countries, most recipient countries are non-Arab-Islamic countries. For example, Benin, Mozambique, and Zimbabwe are the greatest beneficiaries of the Fund. Thus, the motive of the Fund is humanitarian and looks to eliminate poverty on the African continent. 135‘Saudi Arabia and other Arab OPEC members have also played a major role in the decolonization process of black Africa. Due to the fact that nine of the OAU members belong to the Arab League, they made the issue of decolonization of African countries their primary objective in the 1960s by using oil as a weapon against South Africa and Portugal (Ojo 1990). African countries south of the Sahara have been experiencing critical economic crises in numerous sectors, such as the poor performance of agriculture combined with a rapid population increase and, more recently, financial pressure caused by imported inflation and export price instability. Most countries in sub-Saharan Africa are at the bottom of the development ladder; therefore, the OPEC Fund has an aid strategy for itself and other regional funds to alleviate poverty in SSACs. The OPEC Fund has helped the government of each country in sub-Saharan Africa to take the lead in coordinating and maximizing aid flows and increasing the effectiveness of external aid (OPEC Fund for International Development, Sub-Saharan Africa: The Need for a Concerted Aid Strategy \982). The fiznds also provides soft loans and grants to poor African countries. Loans provided to SSACs have been spent in many sectors, including energy, transportation, agriculture, education, industry, water supplies, health care, and communications. Saudi Arabia contributed 30.1% of the total institutional capital (US$3.436 billion), of which US$5.68 billion was allocated as a contribution to the IMF Trust Fund. The OPEC Fund also supplies credits to non-oil-producing countries, especially to those that have had difficulties due to the increase in the price of oil, such as the SSACs. One of the objectives of the OPEC Fund is to meet the short-term 136needs of developing countries by providing loans for balance-of-payments support. It also finances technical assistance activities in the form of grants. Arab Bank for Economic Development in Africa The decision to create a specialized Arab agency to provide aid to non-Arab African countries was an important step toward cementing an Afro-Arab relationship Only African countries that are members of the OAU and not of the Arab League are eligible for BADEA aid. According to the president of BADEA, Dr. Ayari Chedly, there were two major events behind the creation of the bank; both took place in 1973. The first was a political event, which was the most important reason for creating the bank, the expression of a majority and active solidarity by the non-Arab African states on the Palestinian question following the October 1973 War. Nearly all of the African states expressed their solidarity by breaking off diplomatic relations with Israel. In the 1970s, there was almost complete agreement between Arabs and Africans that there were connections among racism, apartheid, colonialism, and Zionism. Also, the 1970s saw the emergence of Third World solidarity groups such as OPEC. In 1973, President Houari Boumedienne of Algeria became chairman of the Non-Aligned Movement, and in the following year, the Algerian Foreign Minister, Abdul-Aziz Buteflika, the current president, was nominated president of the UN General Assembly. Both these nominees supported Arab-African solidarity, since Algeria is an Arab-African country (Kwarteng 1992:167-170). The second event behind the creation of BADEA was an economic event, the noticeable increase in the 1970s in Arab financial resources resulting from increased oil prices by OPEC against the industrial oil-consuming countries. The conjunction of 137those two events, political and economic, lay behind the decision taken by Arab leaders at the Al-Jazair Summit of 1973. This decision was aimed at increasing and supporting Arab-African political solidarity with multilateral aid programs, short-term aid through the Special Arab Aid Fund for Africa (SAAFA), and long-term aid through BADEA. In Arab-African cooperation, there is no hidden element of compensation; it is a step toward building solidarity between Third World countries with similarities in history, geography, and culture, with the most important element being shared, destiny. In November 1973, the founding charter of the Arab Bank for Industrial and Agricultural Development was signed in Algiers. The sixth Arab summit, held that -year, took steps toward building solidarity among African countries. Sixteen of the 20 Arab states init ly agreed to create an Arab Bank for Industrial and Agricultural Development in Africa, with an initial capital fixed at US$125 million. Iraq and Libya later joined as members, bringing the total to 18 out of 20. In addition, the summit group decided to create a Special Arab Aid Fund for Africa (SAAFA) and an Arab Fund for Technical Assistance to Arab and African Countries (AFTAA). The Arab Bank for Industrial and Agricultural Development, SAAFA, and AFTAA eventually become BADEA in 1974. When SAAFA merged with BADEA in November 1976, the bank’s capital tripled to US$231 million (adjusted). At the ninth summit in 1981 in Algiers, the board of governors increased BADEA’s capital by US$250 million; thus BADEA capital reached a total of USS9.88 billion. Also at the same summit, the ‘Arab ministers recommended creating a fund to help African countries with their budget deficits. The fund provided grants for US$214 million until it closed in 1977 138(Nahoosh 1995:131-137). However, BADEA is still smaller than the IDB or the OPEC Fund in terms of financial resources. ‘According to a survey published by BADEA on Arab contributions to development aid, Arab financial contributions, granted on liberal or commercial terms of up to 36 months to Arab-African countries between 1973 and 1976, reached USSI.518 billion. After adjustment, contributions subscribed during this period reached a total of US$2.624 billion. Furthermore, according to the same report (in its 1984 edition), Arab contributors pledged a total of USS8.884 billion between 1973 and 1983 for development projects in 41 non-Arab African countries (Ten Years of Afro-Arab Cooperation 1975-1984). BADEA began its activities in March 1975 from its headquarters in Khartoum, the capital of Sudan. Other capitals that accommodate headquarters offices include Algiers, Kuwait City, and Tunis. BADEA’s statutory framework states that financed projects must contribute to the economic and social life of the people as well as to the borrowing country. The amount of a loan for any project shall not exceed 50% of the total cost of the project; and the amount must not exceed USS15 million. However, for small projects, the amount shall not exceed 80% of the total cost of the project. BADEA made its first partial payment of a loan in December 1976—US$2,076, 198 to the Congo to help finance the re-laying of the Congo Ocean railway. The first repayment to BADEA was received from Kenya in March 1981 for US$50,000 for a loan of US$4 million approved in 1976 for an integrated rural development project. By December 31, 1984, BADEA’s disbursements totaled USS5.028 billion. and the cumulative repayment for the same period on all loans granted since 1975 reached 139USS36.7 million, 5.5% of the Bank's commitments of US$671.5 million (Arab Bank for Economic Development in Africa Anmual Report, 1990-1993). In 1993, BADEA agreed to provide 14 loans for a total of US$73.524 million. Thirteen of these projects were signed at its headquarters in Khartoum, Sudan, and one ‘was signed in Dakar, Senegal (Table 17). Table 17 Distribution of BADEA Loans, 1993 ‘Name of Project ‘Amount (in USS million) Mauritius Lamar water Mauritius Water sewage Mortise Credit loan Burkina Faso Tendago-Kombiana road Senegal Anderya road Mali Animal protection Guinea Agricultural development Mozambique Countryside roads Develop Salaam area Bone for aggregate Rebuild transportation Booboo-Order road Expansion of Dakar port Viyza-Kalgi road TOTAL ‘(BADE Annual Report 1994) In terms of the geographic distribution of the BADEA loans in 1993, West Africa took 9 of the 14 for a total of US$46.074 million; only four were for East Affica, totaling US$25.9 million. However, the total amount of loans to West Africa from 1975 to 1993 reached US$609.66 million, 56.7% of the total, with USS464.76 140million going to East Africa, 43.3% of the total. Most of the money was divided among the three most important components of development: infrastructure, agriculture, and industry. This division of loans was completed with much ‘cooperation with each country’s priorities (Table 18). Table 18 Number of Amount % Projects __ (in USS million) 46.07 64.0 25.90 36.0 71,.97_ 100.0 BADEA Annual Report 1994 BADEA is a developmental bank that focuses on promoting development projects in SSACs, which helps alleviate poverty and raise the standard of living of the African people. Its sole objective is to provide financial assistance only to African countries. However, some projects are too big and need cooperation with other financial institutions, such as the SFD, the IDB, and the OPEC Fund. Therefore, co- financing is very important for BADEA in order for it to accomplish its objectives, especially for large projects that usually need more than one financial institution to accomplish the target. BADEA works with several financial institutions. From 1975 to 1993, BADEA participated with 14.1% of a total of $8.252 billion in loans, co- financed with several other financial institutions (Table 19). 141Financi ers of BAD! ‘Amount Percentage (in USS millions) Arabic funds, IDB, and the OPEC Fund World Bank African Bank for Development European Unity Industrial countries (G7) Local and beneficiary recipients *Includes US$5 million from the ical Bank for Agricultural Development **Includes US$5.6 million from the West African Bank for Development. Source: BADEA Annual Report 1995, Finally, the main objective of BADEA is to increase solidarity between Arab and African countries and their financial agencies. In order to achieve this goal, BADEA decided to include political relationships in enhancing solidarity between Arabs and Africans, and black Africa in particular. At the sixth Arab summit, held in Kuwait in 1973, Arab countries were urged to break off diplomatic relations with Portugal. BADEA asked the international community to punish those colonial regimes, as well as countries such as South Africa, that discriminated against black people. At the same summit, BADEA requested that all Arab countries impose a complete oil embargo against three colonial regimes in Africa: Portugal, Rhodesia, and South Africa. Moreover, the board of govemors of BADEA, during its fifth annual meeting, held in Kuwait in April 1979, decided to suspend Egypt's membership following the Camp David accords between Egypt and Israel. Then, in May 1982, BADEA announced the suspension of all its activities in Zaire following 142the resumption of diplomatic relations between Kinshasa and Israel, which was contrary to the Arab-African consensus. The same happened with Liberia in 1983. Togo was among the African countries to break diplomatic relations with Israel Togo’s decision to break ties with Israel did not please Nigeria, which had maintained that, in order for the OAU to continue mediation efforts in the Middle East conflict, it was politically wise to have relations with both sides of the conflict. Nigeria’s decision did not please the Arab countries, especially when General Yakubu Gowon, Nigeria’s head of state at that time, was the chairman of the OAU (Kwarteng 1992:169-177). However, BADEA is still a great model for cooperation between its members and non-Arab African countries to promote political, economic, and social objectives. The total contribution from Arab countries to LDCs, including Africa, from 1970 to 1993, was US$94 billion. The Gulf States, including Saudi Arabia, Kuwait, Qatar, Bahrain, the UAE, and Oman, provided 93% of this amount, The first trip by Dr. Chedly, president of BADEA in 1976, following his election, was to Saudi Arabia to discuss with its leaders upcoming plans and projects. Saudi Arabia contributed 24.4% of BADEA’s capital, giving the Kingdom a 19.57% voting power over other member states (Arab Bank for Economic Development in Africa, Annual Report 1993) (Table 20). In this context, Saudi Arabia is a major player in the bilateral agencies, such as SFD and multilateral agencies such as OPEC and BADEA, as well as other institutions. The basic objective of BADEA is to emphasize economic, financial, and technical assistance available between Arab and African countries through 143‘encouragement of Arab capital in the development of Africa as well as participation in financial development projects. Table 20 2.13 0.20 127.79 12.19 2.13 0.20 8.87 0.85 42.60 4.06 Saudi Arabia 255.60 24.38 Sudan 214 0.20 Syria 1.42 0.14 Iraq 149.09 14.22 Oman* 15.62 1.49 Palestine 2.130 0.20 Qatar 85.20 8.13 Kuwait 156.19 14.90 Lebanon 7.10 0.68 Libya 170.39 16.26 Egypt 213 0.20 Morocco 15.62 1.49 Mauritania** 2.13 0.20 Total ___1,048.26___ 100.00 “Did not pay USS2,000,000. “*Did not pay US$432,492 Source: BADEA Annual Report 1994. ‘One of the key members of BADEA is Saudi Arabia. The lastt two projects approved in 2000 by BADEA were worth more than US$40 million. One was to Mauritius to build dams, and the second was to Swaziland to build highways (4/- Jazirah articles; http://www aljazirah.com/1998/Oct/gfx/p.24.hth; Riyadh, Saudi Arabia, Oct 8, 1998). BADEA, IDB, and the SFD urge countries around the world, especially members of the OIC and the Arab League, to do business with Africa in general and sub-Saharan countries, in particular. They were the active contributors to 144the “Africa Connection” conference held in Midland, Johannesburg, South Africa in 1997, which attracted 500 participants from Africa, Asia, Europe, and North America, as well as various intergovernmental organizations. In addition, BADEA has signed several cooperation agreements with The World Bank, IMF, UN organizations, the European Economic Community, and the European Investment Bank (A/amanar July 1997:6-21). Saudi Arabian Contributions to Africa for Famine, Drought, and Flood Crises In addition to the Saudi development assistance provided by the SFD, OPEC, and BADEA, the Kingdom has been a major participant in the efforts of African countries in combating drought and other catastrophes. The Kingdom, at both official and national levels, provides shelter for refugees and victims of earthquakes, war, conflicts, and other natural disasters, and has provided fraternal support. Saudi officials and the Saudi people have extended their hands and set up economi programs with donations, grants, and soft loans through bilateral channels. These development projects are aimed at alleviating poverty with irrigation, rural development, and agricultural projects, as well as power generation and transmission plants. Saudi development assistance is linked to people’s needs with a moral motive, such as alleviating poverty, educating people, and improving the country’s economic situation. Sub-Saharan African countries are surviving, but some of their problems are beyond their control. Their economic crises are very deep and are worsening. They have experienced poverty, drought, depressed commodity prices, foreign capital withdrawal, and many other serious situations. The Saudis have extended their hand 14sto the African people whenever Africa has suffered natural disasters such as floods, drought, and earthquakes; for example, during the Sudanese floods in 1990, when the Sudanese called on Saudi officials and citizens to help their brothers. National committees were formed in each Saudi city to receive donations. To ensure that the assistance reached the victims, the Saudi Red Crescent Association (similar to the American Red Cross) opened field centers in Sudan, Mali, and Niger. About 180 doctors, pharmacists, technical assistance specialists, and administrators worked in these centers along with 80 Saudi officials and volunteers. In addition, Saudi Arabia donated US$32.66 million to the UN’s First and Second Conference for Assistance to Refugees in Africa, As mentioned earlier, the Saudi program for digging wells and rural development in African countries was extended through bilateral channels. The Kingdom allocated a large amount of money to the well digging program, with USSS6.67 million donated to the second phase of the program (The Kingdom... 1991:29). Contributions by individual Saudi citizens to the African famine crises are also worth mentioning. This is the first time in the history of Saudi Arabia that the government and its citizens in each city and town have cooperated to collect contributions for African victims. Many of the Saudi officials and volunteers who have visited the African countries that suffered from drought and famine are trying to end this human tragedy. They are talking to neighbors and friends and using the media to tell the tragic stories about what they have seen in poverty-stricken SSACs. They are urging people to help their brothers and sisters in Africa. The Saudis have established local committees in each city and town, in malls, and at local events to 146motivate people to pledge contributions and to participate effectively in the relief campaign. Urgently needed relief supplies such as food, clothing, and tents have been sent to African countries according to the recommendations of the Red Crescent representatives and Saudi Embassy employees who have visited the worst-hit areas. Saudi relief campaigns have helped victims in Djibouti, Ethiopia, Mali, Niger, Somalia, and Sudan. In 1985, for example, the Kingdom provided 25,000 tons of grain and 10,000 tons of edible oil at a cost of US$17.63 million, which represented the cost of securing these items from world markets, as well as transportation and distribution among the recipient countries (Al-Eisa 1986: 15-49). Conclusion Despite its wealth in natural and human resources, Affica still faces many economic crises. Drought causes a lot of pain for the people of many African countries. As a consequence, production in several sectors, such as agriculture, minerals, and oil has failed sharply. In addition, the number of internal and external refugees, displaced people among African countries, especially those south of the Sahara Desert have increased sharply because of drought and political instability. Therefore, Saudi Arabian bilateral funds assist the Sahel countries to enhance water supply sources that benefit both humans and animals. Villagers saw their animals dying in some of the Sahel countries and asked Saudi officials to provide water for their animals, too, since they depended on them for transportation and food, e, in Chad and Mali. Saudi Arabian projects, conducted through the SED, to dig wells have focused on poverty areas and areas where people have suffered from drought. 147Thousands of wells have been dug in these poor areas, where villagers and their animals are being rescued from drought. The SFD provides loans to governments (public sector), but not to the private sector. Conditions for SFD grants and loans are that they be directed toward the economic and social well being of the borrowing country and help alleviate poverty in that country. The SFD has made several agreements with African countries to complete projects in areas where the majority of the population are non-Muslims, such as in Cape Verde, however, SFD projects usually tend to be exclusively in areas where Muslims are the majority. The SFD charges no compounded interest, only nominal administrative and service charges. Loan charges range between 1% and 3% of the total disbursed loan amount to cover overhead expenses. The charge, depending on the economic classification of the recipient country, can be as low as 1%, with a long grace period. Also, Saudi Arabia provides grants, as high as 90% of the loan, depending on the economic situation of the recipient country. Poverty makes some poor African countries unable to pay back their loans, which leads Saudi Arabian officials to influence members of OPEC and BADEA to give the country more grants and to ease the payments. This work suggests that the SFD fully depends on the Saudi people to implement projects since they are able and have the experience and willingness; thereby, aid done by foreign companies, such as GTZ, could be eliminated. Thus, African villagers will not be confused about who provides such assistance, and the assistance will be more welcomed. Furthermore, since GTZ is a consulting company 148it might not target needy Muslims, or it might try to avoid a highly concentrated majority of Muslims. The data suggest that political motives might also play a role in GTZ’s consulting since its home country Germany has a colonial history. By giving the SFD full authority, including consulting and choosing the location, there will be a major impact, since African villagers might more readily accept assistance from a ‘Third World country. The fact that Saudi Arabia has over 30% of the voting power among members of the OPEC Fund makes it an essential member. The OPEC Fund has provided development assistance to SSACs, including loans directed toward paying budget deficits, as well as technical, emergency, and food assistance. Also, the OPEC Fund provided oi! as emergency assistance to those countries that could not pay their bills during the oil correction period. Saudi citizens have maintained their attendance in the OPEC Fund, which gives the government of Saudi Arabia more influence over member countries. The creation of a special fund to help non-Arab African countries was a major step forward toward building political, developmental, and cultural links among the two regions. Both BADEA members and African countries are located in the southem hemisphere, where most of the anti-colonial movements are located, and are categorized as less-developed countries. BADEA, as well as the SFD and OPEC, finance and/or co-finance developmental projects aimed at eliminating poverty in non- Arab African countries. BADEA is generally believed to have re-connected Arabs and Africans, by providing development assistance. But one of the main obstacles for 149BADEA, as with the SFD and OPEC, is the difficulty of repayment of the loans, which is mainly because of political instability and military coups. Saudi Arabia has strong voting power over other member countries due to its major contributions in the SFD, the BADEA, and the OPEC Fund. Also, Saudi Arabia has a representative on the Executive Directorate of The World Bank and the IMF. Despite the economic situation of the Kingdom, especially after the second Gulf War in 1990, which caused the Kingdom to have a budget deficit for the past decade, it has continued its strong role in bilateral and multilateral institutions and is still paying its share in full without delay. Saudi Arabian economic assistance to SSACs is motivated by the principles of Islam. Since 1974, the Kingdom of Saudi Arabia has been one of the largest donors of economic assistance to sub-Saharan African countries, both in relative and in absolute terms. In relative terms, as measured by GNP, Saudi Arabia has given 7% of its GNP—100 times more than the amount suggested by the UN—which is 0.7% of GNP. In absolute terms, only the United States surpasses Saudi Arabia in donations. Saudi aid given to developing countries grew from US$335 million in 1973 to more than USS3 billion in 1978, 150CHAPTER V. SAUDI CULTURAL ASSISTANCE THROUGH BILATERAL AND MULTILATERAL ISLAMIC INSTITUTIONS Introduction ‘As mentioned in the opening chapter, Islam plays a significant role in all the decision-making policies of the Saudi Arabian government. Certainly this includes its economic and foreign policies. Islam is an important factor in the relationship between Saudi Arabia and modern-day African countries. Saudi Are has willingly accepted the Muslim obligation to share its wealth with Islamic countries such as those in sub-Saharan Africa. The Kingdom supports several African countries’ economic and social development plans as well as Muslim organizations. According to Alfarsy (1992), Saudi Arabia has provided a total of US$20.53 billion as non-reimbursable development assistance and concessional loans to members of the OIC since its establishment (to 1990). The OIC’s least-developed countries have enjoyed a large share of Saudi assistance because most of these countries are in Africa. Makkah, situated in Saudi Arabia, is the heartland of Islam, and Islam has the most influence on Saudi Arabia's cultural policy. Saudi Arabia attempts to follow Islam’s mandates with regard to support and proper treatment of neighboring countries, especially in assisting the development of diplomatic support for its foreign policy. Many Muslim countries around the world receive special consideration from Saudi Arabia’s development assistance programs largely due to their religious affinity. The Saudi government hosts a number of Islamic organizations and leagues, such as the Muslim World League (MWL), which plays an important role in cementing Muslim countries together on the high moral principles taught in Islam. 151‘Saudi Arabia also have a Muslim radio station called the “Voice of Islam.” According to Nyang (1982:5), in 1962, King Faisal began the “Voice of Islam” in response to former Egyptian President Abdul Nasser’s radio station “Voice of the Arabs” and established the MWL to counter Nasser’s Egyptian Supreme Council on Islamic Affairs, Furthermore, Saudi Arabia hosts the World Assembly for Muslim Youth (WAMY), the OIC, the International Islamic Relief Organization (RO), the Islamic Solidarity Fund (ISF), and the Islamic Development Bank (IDB). The African continent has received much attention from the Saudi government in terms of promoting religious unity under Islam. Most of these organizations and leagues depend on Saudi funding for their continued existence. Islam has been practiced in numerous places in Africa since the lifetime of Prophet Muhammad {Peace Be Upon Him} 1,400 years ago. As a matter of fact, Prophet Muhammad {Peace Be Upon Him} permitted his companions to emigrate to Al-Habisha (known today as Eritrea and Ethiopia) as persecution by his enemies intensified. He said to them, “If you go to Al-Habisha you will find a king who does not do injustice to anyone, It is a land of truthfulness, and you may stay there until Allah finds a way out for your present dilemma” (Ibn Hisham 1955:72). The king of Al Habisha, Al-Najashi, was a good Christian who loved Islam. Some of the closest companions to the Prophet {Peace Be Upon Him} came from Affica, such as Bilal Ibn Rabah, the first Muezzin (a person who calls for prayer), Nafea Ibn Abdul-Rahman, and Sumayyah, the mother of Amr Ibn Yaasir. This is considered the first wave of Muslims who migrated to Africa to share the message of the One God of Islam 152Through the travels of the early Muslims, Islam was established in Aftica, especially in the countries on the East Coast along the Red Sea and the Hom of Africa, such as Ethiopia, Kenya, and Somalia. Unlike North Africa, to which Islam spread through armed conquest, Islam spread southwards across the Sahara Desert, mainly through peaceful means of migration and trade from the middle of the 6" century CE onwards. Al-Salloom (1997:10-12) notes that Islam arrived on the East Coast of Africa as early as the 7" century CE during the rule of the second caliph (leader), Umar. Muslim traders settled and intermarried with Africans, thus laying the foundation for the Muslim community in East Africa. In contrast to Christian missionaries, the followers of Islam generally went overland into tropical Africa. This was a period of deeper penetration and consolidation into East and West Africa through trade, settlement, and proselytization. The work of the Islamic scholars and teachers led to the grooming of local teachers and scholars for the indigenous population who were particularly effective in their own communities. This Islamic practice of developing and opening local centers for the purposes of training African teachers and scholars drawn from the indigenous population was a clear demonstration that Islam, unlike Christianity, did not depend on a foreign clergy (Kokole 1984:687- 702). Today, Islam occupies an important position in Africa and Asia. In terms of its distribution, it is generally described by scholars, such as Ali Mazrui, as an Afro- Asian religion. This view is based on the fact that Muslims are generally found either in Africa or Asia, although there are minorities of Muslims elsewhere on the globe. Muslim moral and social values expanded, until, by 1990 there 241.4 million Muslims 153living on the African continent (Addawood 1992). Since the time Islam spread into Africa, the people from both regions have traveled back and forth for trade, culture, and religious reasons. Islam reached across North Africa with its conquering armies. However, in sub-Saharan Africa, there was more trade than warfare. Africans were not compelled to embrace the Arab culture and change their life styles. Arabs who went to Africa learned to speak the languages of the people. They adapted to the African cultures and did not discriminate against blacks; therefore, Africans accepted the beauty of Islam voluntarily. This was unlike European colonization, where foreign countries forced the local population to change their culture, including losing their native language and religion. The consolidation of Islamic states in SSACs resulted in some disintegration of social and tribal groups, thereby leaving Islam as a credible force for strengthening ‘and cementing social cohesion. This tended to encourage further Islamization, even after the Europeans established their presence. Thus, the colonial period also witnessed the spread of Islam. Peaceful conditions and facilities for communication later enabled Muslim traders and teachers to circulate freely and invited traditional societies to embrace the Islamic faith (Kokole 1984). Saudi Arabia supports Muslims around the world in general and those in African countries, in particular. Saudi Arabia places heavy emphasis on the brotherhood and unity in Islam everywhere, but nowhere more than with their neighboring brothers and sisters in Africa. Arabic is the language of The Holy Qur'an; therefore, African Muslims share the same reverence for this holy book as do Saudis. To strengthen the brotherhood 154between Saudis and Africans, Saudi Arabia has funded numerous cultural projects, ranging from building Islamic centers to The Holy Qur'an and other book distributions. These Islamic centers in various parts of Africa assist the Muslim leadership in clarifying, structuring, and sharing Islam in Africa (Nyang 1982). Africa has only 10% of the world’s population on its continent, yet it is home to 33% of the world’s spoken languages (Hassan 1996). Alll the major world religions are practiced in Africa, including Islam, Christianity, and Judaism. Additionally, many other religions are practiced by the local African cultures. Differences in African cultures, superstitions, and traditional beliefs have caused many civil wars, some lasting many years, such as the wars in Sudan, Rwanda, Burundi, Angola, and Mozambique. Yet the teachings of Islam are mostly opposed to what is taking place in these areas. Let us consider what The Holy Qur‘an says in regard to tribalism and racism: © mankind! Allah has created you from a male and a female, and made you into nations and tribes that you may know ‘one another. Verily, the most honorable of you with Allah is that one who is God-Fearing and righteous. Verily, Allah is All Knowing, All Aware. (49:13) Obviously, the teachings of peace and submission in the message of the true Islam could help provide a means for a solution to these problems. Consider that, at present, Istam is the main religion in most African countries, with nearly 50% of the population being Muslim. Most Muslims speak Arabic (the language of The Holy Qur'an) as their main language when one includes North Africa as part of the African continent. We can see that Islam is already prevalent in Africa; it does not need to be 155spread throughout the land to make a difference. Islam is there; it merely needs to be taught and implemented properly. Language is very important when it comes to Affican ethnicity. The African indigenous languages during the colonial period were critical and language policies took an ideological path. For example, Christian European missionaries during the colonial period prohibited the use of Swahili (similar to Arabic) in public schools because they felt it encouraged the spread of Islam (Hassan 1996). Islam in the SSACs is widely accepted because it does not represent the colonial religion, which enhanced the class system and reminded Africans of colonial suffering. Because of several issues, non-Arab Afficans accept Islam. These include the following: 1. Islam is not viewed by Africans as a strange religion, since most of the Muslim scholars in Africa are African; 2. Islam is considered the clearest, easiest, and most natural religion and is not complex, as are some other religions; 3. There are many similarities between Islamic principles and the African’s simple daily life and straightforward and uncomplicated traditions. For example, polygamy is widely practiced in Africa and is permissible in Islam under limited circumstances. Allah allows a man to marry more than one wife, but not more than four and provided that he can deal with them justly (a discussion of polygamy is beyond the scope of this research.); and 1564, Islam emphasizes the role of justice and equality among all races and ethnicities. All people, whether Arabs or non-Arabs, black, or white, are equal according to Islam (Hassan 1996). While many societies would view assisting distressed Third World countries as a benevolent humanitarian effort, Muslims should view it as an obligation and duty of every Muslim to contribute as much as possible to help in solving these problems. Allah speaks clearly on this subject in Surah Al-Nisa [4:36]: Worship Allah and join none with Him (in worship); and do good to parents, kinsfolk, orphans, al-masakin (the poor), the neighbor who is near of kin, the neighbor who is a stranger, the companion by your side, the wayfarer (you meet), and those (servants) under your authority.” Allah bas spoken clearly to the Arabs in their own native language of Arabic. He has told them what He expects from them with regard to the wealth and treasure that He has bestowed on them. Muslims understand from the start that the wealth of this world is only a test from Allah, Accumulation of worldly things is not to be thought of as an end in itself. Muslims realize that there will most definitely come a day when they will be asked about the favors bestowed on them in this life. As Allah has said in His Book: (0 you who believe! Spend of what Allah has provided you, before a day comes when there will be no bargaining, nor friendship, nor intercession. And it is the disbelievers who are the Thalimun (oppressors). (The Holy Qur'an 2:254) Muslims are fully aware of the real grand design regarding the conditions of poverty, famine, earthquakes, and pestilence throughout the lands. All of these matters are but a test from Allah. As He has said in His Book: 157And certainly, Allah will test you with something of fear, hunger, loss of wealth, lives and fruits; but give glad tidings to those who forbear with patience. (The Holy Qur'an 2:155) In this chapter, several bilateral and multilateral Islamic institutions, such as the OIC, the IDB, and the MWL, which are heavily supported by the government of Saudi Arabia, are discussed. The headquarters of all these institutions are located in Saudi Arabia. Many Muslim organizations and agencies depend on Saudi Arabia's political and economic support, which the Saudi government, as well as its citizens, provides with great enthusiasm, both morally and economically. The OIC is considered to be home to all the Muslim countries. Itis actively involved in resolving conflicts of Muslim countries as well as bringing about peace within its member countries. Also, the OIC attempts to resolve disputes and civil wars among member countries as well as defending Muslim minorities against oppression and poverty. There are several OIC agencies working hand in hand with government officials of the member countries. It coordinates Arab aid to Muslim African countries for development programs, constructs mosques and schools, and organizes courses for Muslim religious leaders in Arab and African countries (Oded 1986: 15-16). Huntington (1996:176-7) notes that Muslim leaders from Saudi Arabia, Pakistan, Morocco, and other Muslim states established the OIC on the basis of religion. Accordingly, all states with substantial Muslim populations now belong to the Conference, which is the only interstate organization of its kind. He states that Christian, Orthodox, Buddhist, or Hindu governments do not have interstate organizations with memberships based on religion. In addition, Saudi Arabia has sponsored and supported many non-governmental organizations (NGOs), such as the 158World Muslim Congress (a Pakistani creation), and the Muslim World League (a Saudi creation). Saudi Arabia supports and sponsors numerous Islamic organizations and parties that share the same beliefs and builds brotherhood among Muslims. Thus, when it comes to material wealth and how it is to be dispersed, leaders of Muslim countries already have a clear mandate from Allah in The Holy Qur'an with regard to how and when these matters are to be discharged. Let us look to the way The Holy Qur'an describes family and wealth to those who have been blessed. “Your wealth and your children are for you a major test, whereas Allah, with Him is the great reward (Paradise)” (The Holy Qur'an, Surah At-Taghaabun 64:15). Understanding the perseverance and steadfast nature of the Muslims in times of calamities, disasters, and chaos also points straight back to the teachings of The Holy Qur'an. No calamity befalls but by the Preordination of Allah [Qadr-tu Allah] and whoever believes in Allah, He (Allah) Guides his heart. And Allah is All-Knower of everything. (The Holy Qur'an 64:11) One of the financial developmental agencies discussed is the Islamic Development Bank (IDB). The IDB is similar to the SFD, OPEC, and BADEA. These developmental agencies are among the components of Saudi Arabia's foreign policy toward SSACs, as is Saudi Arabia's economic and Islamic assistance to Africans. Also discussed in this chapter are the fundamentals of Islamic banking, including the Islamic economic tools that the IDB uses to provide Islamic and development assistance to SSACs. Some of the Islamic economic tools are different from the tools used by non-Islamic institutions such as The World Bank, the IMF, and commercial banks. Loan financing, technical assistance, and leasing are some of the 159tools that Islamic banks and the IDB use to help Muslim nations in their fight against poverty and avoidance of neo-colonialism by Western financial institutions. The government of Saudi Arabia has used the IDB, as well as other Islamic agencies, such as the OIC and the MWL, as a tool to provide assistance to Muslims in SSACs as well as to Muslims around the world. ‘Organization of the Islamic Conference Fire raged through the sacred Muslim site of Al-Aqsa Mosque (near the Dome of the Rock in Jerusalem) in late summer 1969, but it was no accident or act of nature. A Jewish dissident, wanting to destroy this most holy site in Islam, deliberately set this blaze on August 21, 1969. Masjid Al-Aqsa in Jerusalem has always been considered by all Muslims to be the third holiest of sites in Islam. Over 1,400 years ago, Allah said: Glorified (and Exalted) be He (Allah) Who took His servant (Mubammad, peace be on him) for a journey by night from A/- Masjid Al-Haram (in Makkah) to AlMasjid Al-Haram (in Jerusalem), the neighborhood whereof Allah has blessed, in order that Allah may show him (Muhammad, peace be on him) the Ayat of Allah (evidences, signs, etc.). Verily, He is the All-Hearer, the All-Seer. (The Holy Qur'an 17:1) (Noble Qur'an, M. Khan, and M. Hillali.) Al-Aqsa also was the place where Prophet Muhammad {Peace Be Upon Him} made Al-Mi'raj (ascension to heaven at the time of) /sra’, also known as one of the miracles of the Holy Prophet (Peace Be Upon Him}, called the Night Journey. It was also the first Qiblah (direction to face during prayers) for Muslims and a most sacred site of Islam since the lifetime of Prophet Muhammad {Peace Be Upon Him}. Again we observe what Allah has said in that regard in His Noble Recitation: 160For every nation there is a giblah [direction] to which they face (in their prayers). So hasten toward all that is good. Wherever you may be, Allah will bring you together (on the Day of Resurrection). Truly, Allah is Able to do as He Wills. (The Holy Qur'an 2:148) This horrible tragedy outraged Muslims around the world, and it became a chief factor behind the formation and establishment of the OIC only one month later at a summit held in Rabat, Morocco, on September 22-25, 1969. As a result, King Faisal called for a Holy War against Israel's acts and its illegal occupation of Palestine. Protecting and helping Muslims around the world has been the main objective of Saudi leaders since the time of King Abdul-Aziz Bin Salud. At the Arab summit in Cairo, Egypt, on October 21, 2000, Saudi Crown Prince Abdullah said, “Our support for the Palestinians should not be limited to psychological and political support” (The Washington Post 123, #322, Sunday Oct. 22, 2000, p. A29). The Saudi proposal was one of the more concrete steps offered at the meeting, at which Arab leaders emphasized the need for practical diplomacy. The Saudi government asked the Arab world from the Atlantic Ocean to the Gulf to call for e holy war, or Jihad, against Israel, which is the same policy that King Faisal followed. However, he died before accomplishing his heart’s desire—to offer prayers to Allah in the sacred precinct of the holy shrine at Al-Aqsa Mosque. Crown Prince Abdullah called for a USSI billion fund to support Palestinian families injured in Palestine and to defend the Muslim charter of East Jerusalem against Israel’s insistence that the city is its undivided, individual, and eternal capital. Saudi Arabia will contribute one-quarter of the money (The Washington Post, Oct. 22, 2000) 161The formulation of any organization or community is ideological, economic, political, or humanitarian. The United Nations (UN), European Community (EC), Organization of African Unity (OAU), the Arab League, and the North American Foreign Trade Agreement (NAFTA) represent all these purposes for establishing an organization. However, the OIC was established on the basis of The Holy Qur'an and the teachings of Prophet Muhammad {Peace Be Upon Him}. The significance of the OIC character is very different from just sociological differences between traditional and modern ways. It is based on the traditional Qur’anic philosophy of the Islamic Ummah, which is driven by the Shari‘ah. Yet the OIC faces many difficulties in applying the Shari’ah, since many member states do not recognize the superiority of the Shari’ah over secular law. No other international government organization, even the UN, faces such a difficulty. The OIC and the UN share universal ideologies. All Arab League member countries and most OAU member countries are members of the OIC. It is associated with the principal goals with the non-aligned movement and more generally with Third World countries (Al-Ahsan 1998), The OIC is a global intergovernmental organization of Islamic states. As of December 1998, it comprised 56 state members and four observers (Table 21). The primary objectives of the OIC are to promote unity and cooperation among its members in the political, economic, and social spheres. It cooperates with the United ‘Nations and other international organizations in fostering peace and promoting social and economic development in combating ethnic or racial intolerance. Also, one of the main objectives of the OIC is to help SSACs eliminate and fight against colonialism in all its forms and manifestations. It constantly seeks to play an active role, working in 162concert with the Saudi government as well as other international organizations, in bringing peace, security, and justice to Muslim countries. The OIC is the second largest intergovernmental organization (INGO) after the United Nations, in which it has observer status on a reciprocal basis. It is worth mentioning that all OIC members are also member states of the United Nations (Memorandum Permanent Observer Mission of OIC to the UN). Article VIII of the OIC charter defines the conditions of membership as follows: ‘The Organization of the Islamic Conference is made up of the States which took part in the Conference of Kings and Heads of State and Government held in Rabat and the two Foreign Ministers’ Conferences held in Jiddah and Karachi, and signatory to the present Charter. Every Muslim State is eligible to join the Islamic conference on submitting an application expressing its desire and preparedness to adopt this Charter. The application shall be deposited with the General Secretariat, to be brought before the Foreign Ministers’ Conference at its first meeting after the submission of the application. Membership shall take effect as of the time of approval of the Conference by a two-thirds majority of the Conference members. (Charter of the Organization of the Islamic Conference, Article VU) ‘The Charter does not define what is meant by ‘Muslim state,” but it appears from OIC publications and meeting minutes that the term ‘Muslim state’ means a state in which Muslims constitute a majority of the population. However, the OIC has not followed any consistent policy in defining a Muslim state. For example, the OIC accepted the membership of Uganda, although the majority of its population is not Muslim. Uganda applied to the Conference in 1974 and was admitted, apparently because, at that time, Uganda had a Muslim president. Yet Uganda still is a regular 163Table 21 Membership of the izati i 98 Afghanistan . Indonesia Albania Iran Saudi Arabia Algeria Iraq Senegal Azerbaijan Jordan . Sierra Leone Babrain Kazakhstan Somalia Bangladesh Kuwait . Sudan Benin . Kyrgyz Republic Suriname Brunei Dar Ussalam Lebanon Syria Burkina Faso Libya Tajikistan Cameroon Malaysia Togo Chad Maldives Tunisia Comoros Mali . Turkey Djibouti . Mauritania Turkmenistan Egypt . Morocco Uganda Mozambique United Arab Emirates Niger Uzbekistan Nigeria Yemen Oman Pakistan Republic of Bosnia and Herzegovina Central African Republic Republic of Céte d'Ivoire Kingdom of Thailand Observer Muslim Communities Turkish Muslim Community of Kibrit 2._Moro National Liberation Front ‘Source: Charter of the OIC 1999. 164member of the OIC, although its no longer has a Muslim president. Several countries with a Muslim majority have never applied for OIC membership, including the Ivory Coast and Tanzania. At the same time, a country with a sizable number of Muslims, such as India, was rejected because it has a Hindu majority. India applied for OIC membership in 1969, during preparation of the first conference in Rabat, but it was rejected, because of its relationship with its neighboring country, Pakistan, and because it sent a non-Muslim (a Sikh) to represent it at the Conference (Al-Ahsan, 1988). The highest Islamic intergovernmental body, the OIC, was established at the first Conference of Heads of States and Governments of Islamic Countries, held in Rabat, Morocco, on 12 Rabie 1389 AH (September 25, 1969). The General Secretariat was set up at the first Islamic Conference of Foreign Ministers (ICFM) held in Jiddab, Saudi Arabia, 15-17 Muharram 1399 AH (March 23-25, 1970). The OIC’s charter was adopted at the third ICFM Conference in 1972. Under the Charter, the OIC established a number of standing committees for consultation among its member states to formulate policies of common concern. It established several subsidiary committees as well as specialized and affiliated institutions for implementing its policies and programs. Some of these related subsidiaries and affiliated institutions will be discussed later. The least-developed OIC countries enjoy a large share of Saudi Arabia's assistance to member countries. Of a total of US$4.63 billion, the least-developed countries received USS1.76 billion or 36.6%. Among the 41 countries that are classified by the United States as least developed, 17 are Muslim countries and 14 are 165Afvican. Saudi Arabia plays a major role in and provides for the OIC, because it believes in the necessity of collective efforts in order to achieve unification among Muslims and Muslim countries under the high standards and moral codes of Islam. Periodic and voluntary contributions and donations extended by the Saudi government to the OIC and its institutions by the end of 1990 totaled USS 76 billion (The Kingdom 1990). At the Third Islamic Summit held in Makkah in 1981, Saudi Arabia announced an allocation of US$101 million for the implementation of an emergency program to assist SSACs, among them Cape Verde, Guinea, and Gambia. Fifteen percent of this amount was allocated to foodstuffs for victims of an African drought, and the rest was to be used in a special program to dig wells and for rural development programs. At the same summit, the OIC announced the establishment of two additional Islamic centers, including one in Guinea-Bissau for US$50 million, The OIC grants aid to existing research institutes for the purpose of including Islamic subjects within their spheres of activity. Therefore, for example, the sum of USS285,000 was allocated in 1981 to the Ahmed Baba Center in Timbuktu in Mali so that it would also serve as a regional institute for Islamic studies (Oded 1986:17-18). Moreover, Saudi Arabia responded to the call at the Fourth Islamic Summit, held in Casablanca in 1985, for additional relief to the victims of an African drought. This time, the Saudi government allocated an additional US$56.6 million for a second phase or expansion of the well digging program. It is worth noting that Saudi Arabian cultural policy toward African countries is very solid, and the main purposes are based 166on an Islamic brotherhood seeking rewards from Allah. Saudis stand ready to extend their hands to assist Muslims around the globe whenever they need help. The following is a brief presentation of the principal and specialized committees and subsidiary institutions of the OIC and how the Kingdom assists these institutions financially and morally. Principal Organizations of the OIC The OIC has four primary committees, including the Conference of Kings and Heads of States and Governments, the Islamic Conference of Foreign Ministers (ICFM), the General Secretariat, and the International Court of Justice (ICD). Conference of Kin; Heads of S1 Governments ‘The first principal organization is the Conference of Kings and Heads of States, and Governments (Islamic Summit), The Islamic Summit is the principal legislative and policy making organ. It meets in regular session every three years to evaluate political, economic, and social issues concerning member states and to adopt common policies regarding these issues. Also, the regular Summit discusses and issues important memoranda to Muslim nations. Problems arose in the last Summit, which was held in Doha, Qatar in November 2000, when Saudi Arabia and several Muslim countries refused to go to Qatar unless it closed its Israel Office for Commerce. (Doha had made a separate agreement with Israel to open such an office, and this outraged many Muslim countries. Saudi Arabia exercised its political pressure, and the Qatar government met the Saudi demand and closed the Israeli office.) The Islamic Summit normally elects the head of the host state as its Chairman. 167Islamic Conference of Foreign Ministers The second organ is the Islamic Conference of Foreign Ministers (ICFM). The ICFM meets in an annual session to define the organization's policies and examine their implementation. Any request needs to be approved by two-thirds of the member states. Article V of the Charter defines the duties and functions of the ICFM. Two- thirds of the member states in any session of the ICFM form a quorum. Resolutions and recommendations are adopted by a two-thirds majority vote based on the idea of ‘one nation, one vote. The agenda of the ICFM is divided into four categories: political, economic, cultural, and financial and administrative. It receives and considers progress reports of subsidiary organizations and affiliated institutions. Since 1980, the ICFM has regularly held sessions in New York during the UN General Assembly sessions (Al-Ahsan 1998). The ICFM approves the General Secretariat's budget. The Minister of Foreign Affairs of the host country is normally elected chairman. General Secret: The third group is the General Secretariat. The General Secretariat is the executive arm of the OIC and is temporally located in Jiddah, Saudi Arabia, pending its ultimate move to Jerusalem, the third holiest city of Islam. The General Secretariat's creation is similar to that of the General Secretariat of the UN. Secretaries are generally nominated for a non-renewable period of four years. There are also Assistant Secretary-Generals for Political Affairs, Cultural and Social Affairs, Economics, and Administrative and Financial Affairs. The Fourth Assistant Secretary General is responsible for the Affairs of Al-Quds (Jerusalem) and Palestinian causes. 168Article VI(2) of the OIC Charter states that the Secretary may appoint the staff of the General Secretariat “from among nations of Member States, paying due regard to their competence and integrity, and in accordance with the principle of equitable geographic distribution.” The OIC has an unwritten law that no non-Muslim citizen of ‘a member country can be selected for any position in the Secretariat. The Charter provides diplomatic immunities and privileges for OIC officials. However, some member states did not take the Charter very seriously, especially at the beginning, which required the General Secretary to spend a considerable amount of time explaining to conference member states about the organization. Also, many member states became conscious of the key positions in the administration of the organization, and some member states exercised undue power to promote the candidacy of their nationals. The government of Saudi Arabia grants a business location for the OIC and provides a residence for the OIC General Secretary, who is currently Biz Aldeen Aleraqi of Morocco (2001). The Kingdom contributes 10% of the total budget of the OIC. A number of countries pay only a 0.50% share of the total OIC budget, including most SSACs, such as Benin, Burkina Faso (formerly Upper Volta), Chad, Mali, Niger, and Somalia, Saudi Arabia has the largest share member among the member countries. The Kingdom's contribution and voluntary donations to the General Secretariat of the OIC total more than US$12.64 million (Figure 9) Intern: Just © ‘The fourth principal element of the OIC is the International Court of Justice (ICI). The Third Islamic Conference, held in Tasf, Saudi Arabia, in 1981, decided to 169In USS Name of the Institution Ta SR 1. General Secretariat 4739 2. Solidarity Fund and its Endowment 107.47 403.00 3. Fund for Jerusalem and its Endowment 37.00 138.75 4. Research Center for History, Art, and Islamic 2.32 8.71 Culture 5. Center for Statistical, Economic, Social and Training Research 3.25 12.19 6. Islamic Center for Technical and Vocational Training and Research 5.3 21.50 Islamic Organization for Science and Technology 4.90 1837 Islamic Center for Trade Promotion 137 5.150 9. Islamic Jurisprudence Council 2.20 8.233, 10. International Commission for Preservation of Islamic Heritage 43 1.60 11. Islamic News Agency 90.67 34.00 12. Islamic Development Bank 536.44 2,011.65 13, Islamic Radio Station Organization 733 27.50 14, Islamic Capital City Organization 27 1.00 15. Islamic Chamber for Commerce, Industry, and Commodity Trade 1.20 450 16. Islamic Educational, Cultural and Scientific ar 20.90 Organization 17. Islamic Federation for Ship Owners 1.00 o 18. Islamic Solidarity Sports Federation 51 1.90 19. Islamic University in Niger 15.53 58.24 20. Islamic University in Uganda 10.00 37.50 21, Islamic College in Chicago 1.70 6.38 22. Islamic Center in Guinea Bissau 50 1.88 Ahmed Baba Center in Mali Figure 9. i ym Saudi Arabia, 1991 Source: Saudi Ministry of Finance and National Economy 1999, 170create the OIC judicial body on the pattern of the International Court of Justice in The Hague, The Netherlands. However, it is different from The Hague Court because its principles are based on The Holy Qur'an and Sunnah. It also deals with the issuance of fatwas of ‘consultative opinions’ on legal issues. The Court consists of 11 members, all educated in traditional Islamic jurisprudence. It is expected to be located in Kuwait and will serve as the principal judicial organization. The Court will deal with disputes among its member states. Specialized Committees of the OIC The OIC has established 13 specialized committees to deal with different matters under its legislative mandate, including the Committee on Al-Quds (Jerusalem), Standing Committee for Information and Cultural Affairs, and the Committee of Islamic Solidarity with the People of the Sahal Countries. Committee on Al-Quds (Jerusalem) This committee was established at the Sixth Conference of Foreign Ministers, held in 1975. This committee is composed of ministers from 16 member states, among them Saudi Arabia and Senegal. The objectives of the committee are to study the evolution of the situation in Jerusalem and follow up on plementation of OIC resolutions and those of other international bodies. The committee submits an annual report to the ICFM. To secure its resources, the committee depends on donations and grants from the Islamic Solidarity Fund and member countries. The Kingdom supports this committee morally and has financially provided USS37.0 million in grants, The Kingdom has also provided US$5.33 million toward the endowment of this fund (The Kingdom ... 1990). im‘Standing Committee for Information and Cultural Affairs The President of Senegal chairs the Standing Committee for Information and Cultural Affairs (COMIAC). The Committee seeks to harmonize the public information policies of its member states. The Committee's objective is to enhance the quality of information in the media. It reviews OIC cultural strategy and action plans, including presentation and aid of the Islamic religion for peace and progress. Committee of Islami: lidarit jith the the Sahel Countries The OIC established the Committee of Islamic Solidarity with the People of the Sahel Countries (sub-Saharan African countries), chaired by the foreign minister of Kuwait, The government of Saudi Arabia is an active member among the committee's membership, which also includes representatives of the Inter-State Committee for Drought Control in the Sahel. The committee meets annually during the ICFM session. It follows up on implementation of programs to help the people of the Sahel in the form of emergency aid and priority development projects funded through OIC channels. The committee cooperates with other bilateral and multilateral institutions to help brothers and sisters of the SSACs. The OIC also has established channels to alleviate the suffering of Muslim societies in both Muslim and non-Muslim countries. The OIC established committees in Afghanistan and southern Philippines and has contact groups in Palestine, Bosnia- Herzegovina, and Jammu and Kashmir. The OIC emphasizes Islamic unity among member countries and Muslim minorities, To achieve this goal, the OIC established the Islamic Commissions for Economic, Cultural, and Social Affairs (ICECS). The Kingdom of Saudi Arabia provided USS2.33 million in assistance to the Research 172Center for History, Arts, and Islamic Culture that is cementing relations between Muslims. In addition, US$5.73 million was given to the Center for Technical and Vocational Training based in Dakar. Subsidiary Organizations ‘Subsidiary organizations are operational arms of the OIC established with the objective of assisting member states in promoting their national and collective economic and social-cultural development. Their functions are both research and operation. Some of these subsidiaries include the Islamic Solidarity Fund, Islamic universities in Niger and Uganda and the American Islamic College. Aslamic Solidarity Fund (ISF) The most important subsidiary is the ISF. Its function is to aid Muslim countries and associations to spread the word of Islam. The fund is financed mainly by Saudi Arabia (Oded 1986:16). The ISF is located in Jiddah, Saudi Arabia. It was established at the Second Summit Conference held in Lahore, Pakistan, in 1974. It provides emergency relief to member states struck by natural or man-made disasters. It also extends grants to Muslim communities in non-member states aimed at improving their religious, socio-economic, and cultural standards. The Wagf (endowment) of the fund is aimed at strengthening and securing its financial position through liquid assets and properties donated by governments of member states and by Muslim communities and organizations all over the world. A director general, who is appointed by the Secretary General of the OIC, heads the fund. The fund's capital amounts to US$100 million, The Kingdom has supported this Fund since its 173establishment by about US$90 million, including US$20 million in donations to its endowments (Wagf) (The Kingdom ... 1990). imive Ni Another subsidiary is the Islamic University in Niger, located in Niamey. In 1974, the OIC decided to establish two Islamic universities in Africa, one in Niger to serve the educational needs in West Africa and one in Uganda under the government of its former Muslim president, Idi Amin, to serve East Africa. In February 1976, the president of Niger laid the cornerstone for the Islamic university in the city of Say near the capital of Niamey (Oded 1986:18-19). The University responds to the growing higher education needs of the Muslim populations in countries in West Africa. The University teaches both science and Islamic studies. Saudi Arabia pays its annual contribution to the university budget in addition to regular donations from Saudi citizens. Islamic University in Uganda In East Africa, the OIC established the Islamic University in Uganda to be situated in Mbale. The University also was established at the second conference to help Muslim populations in Central and East Africa. The University is intended to develop facilities in higher education and academic research in the arts and sciences in an Islamic academic environment. When Ugandan president Idi Amin was deposed in April 1979, doubts arose as to whether an Islamic university would actually be established in the country. However, Amin's successor, President Obote, assured the OIC delegation, which visited Uganda in April 1982, that he wanted the completion of the university. The OIC allocated USS60 million to each university (Oded 1986). 174However, a civil war in Uganda postponed the university’s establishment until 1988 and forced the university to relocate to a safer area, The university moved from the east to northeast of the country. King Faisal contributed US$8 million to the construction of the university in addition to the USSS million directed to annual expenses. The university decided to use US$4.5 million of the Saudi donation to build a commercial building so the revenue could be reinvested to financially support the university in the future. Later the university named this building “King Fahd Plaza,” which is expected to have USS1 million annual revenues (Ali 1999:16-17). Am Hege Based in Chicago, Ilinois, the American Islamic College, along with the previously mentioned universities, is one of various educational institutions that receives assistance provided by the OIC to Muslims around the globe. Presently, the college offers academic programs in liberal arts and Islamic and Arabic studies. Nyang (1999) notes that the American Islamic College was established by and receives support from the OIC to help spread Islam in the United States. Dr. Abdullah Al Nassef of Saudi Arabia was a key figure in the founding of this college. However, Nyang states that the college needs improvement in both faculty recruitment and student enrollment. Additionally, there are several important subsidiary organizations that support OIC objectives. Among them are the Al-Quds Fund; the Statistical, Economic and Social Research and Training Center; the Islamic Center for Development of Trade; the Islamic Commission for the International Crescent; and the Islamic Civil Aviation Council. Also, the affiliated organs of the OIC play a critical role in maintaining its 175charter. Among the affiliated organs, and most importantly, are the Islamic Development Bank (IDB), which will be discussed in detail later in this chapter, the Islamic State Broadcasting Organization, and the Islamic Chamber of Commerce, Industry and Commodities. The OIC established the Islamic Educational, Scientific and Cultural Organization on the pattern of UNESCO, by a resolution adopted in 1980. Emergence and Development of Islamic Banks The increases in Islamic national incomes and petrodollars in the 1970s expedited the process of Islamization in the area of Islamic banking, The 1970s saw many Muslim countries start to grasp positively the long overdue question of whether to form and then adopt a purely Islamic system of banking. The main difference between Islamic banking and Western banking is that Islamic banking prohibits dealing in interest, according to The Holy Qur'an and the teachings of Prophet Muhammad {Peace Be Upon Him}. Therefore, the rules regarding riba (usury) and its different forms will be briefly reviewed. However, Islamic banking is not only about the prohibition of taking or giving of interest on loans; it is about development and protecting the poor in Muslim societies from poverty. Its scope is to spread fairness among people in the society so each individual knows his responsibilities. Rich people have obligations toward the poor. Most of the Muslim states, such as Bahrain, Egypt, Iran, Kuwait, Pakistan, Sudan, Saudi Arabia, and the UAE, have adopted such a system, developed from the efforts of the 1970s. Those states were already applying the conventional system of banking and finance based on the system implemented by 176the British Bank of the Middle East. Both systems, the Istamic banking system and the conventional system, are applied today in most areas (Al-Suwaidi 1994). Muslims in the field of banking have long been looking for legally permissible means of financing, saving, and investment. This was the major motive behind the emergence of what is now termed Islamic banking. An Islamic bank was first established in the late 1950s in a rural area of Pakistan. In 1963, an Egyptian interest- free financial institution under the management of Ahmed Al-Naggar was established in the city of Ghamr, Egypt (Wilson 1983:75-6). In 1973, a conference of finance ministers from Islamic states decided to set up the Islamic Development Bank (IDB), which opened in 1975 and is based in Jiddah. ‘As well as offering a full range of banking services and interest-free loans, the IDB’s activities are oriented more toward development and social projects of the 43 member countries in accordance with the principles of the Shari’ah (Khan 1983:260). In 1997, a total of 51 member states subscribed to the IDB as a result of increasing the number of countries that had joined the OIC. Capital for the IDB was set at [D2 billion.’ The IDB has played a major role in intemational trade financing among member countries and between the industrialized world and member countries. The IDB is one of the more important specialized financial institutions established within the framework of the OIC. The IDB, along with Islamic banking fundamentals, will be analyzed in detail. Saudi Arabia plays a vital role in this institution and its establishment. The Kingdom of Saudi Arabia owns the greatest share of the bank's capital, with total subscriptions by the Kingdom at [D506.37 ID means “Islamic Dinar,’ or one Special Drawing Right of the IMF. 17million, which is equal to 26.3% of its capital. In addition, the Kingdom extended a grant to the IDB totaling US$18.75 million to finance the construction of the bank's headquarters in Jiddah. Furthermore, the government of Saudi Arabia granted the IDB the land on which its headquarters offices are built (IDB Memorandum). In Saudi Arabia, there are several Islamic banks, partly owned by Saudi nationals outside the Kingdom. The Faisal [stamic Bank was established in Sudan and Egypt in 1977 with an ownership of 51% and 49%, Saudi and other Arab nationals, respectively. Saudi citizens also subscribed 35% of the capital of the Bahrain Islamic Bank, established in 1979 (Wilson 1983:85). There are several other Islamic banks and companies partly owned by Saudi nationals throughout the world. Rules Regarding Riba (Usury) and Its Different Forms Usury or interest (riba) is prohibited in Islam because it is considered an unlawful gain derived from the quantitative inequality of counter-values. Riba is an additional amount received on capital, whether the amount is small or large. Allah said that, “... if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).” The Holy Qur'an 2:279. (Jamil Zeno 1996:231) Usury is Aaram (forbidden) in all the revealed religions, including Judaism, Christianity, and Islam, except that the Jewish people do not see the prohibition as preventing them from taking riba from non-Jews. The Holy Qur'an discusses riba in a number of different places and in periodic order. It explicitly and emphatically prohibits riba. There is complete unanimity among all schools of thought in Islam that the term riba stands for “interest” in all its 178types and forms. The Holy Qur'an in this regard, leaves no doubt in one’s mind that the institution of riba is wholly repugnant to the spirit of Islam, Allah said, “And that which you give in gift (to others), in order that it may increase (your wealth by expecting to get a better one in return) from other people’s property, has no increase with Allah ” (The Holy Qur'an 30:39) “O you who believe! Eat not Riba (usury) doubled and multiplied...” (The Holy Qur'an 3:130) “O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba (usury) (from now onward), if you are (really) believers. And if you do not do it, then take a notice of war from Allah and His Messenger, but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).” (The Holy Qur'an 2:278, 279) (Jamil Zeno 1996:231-2) This warning of “war from Al/ah and his messenger” clearly points out that the institution of interest (riba) is something which runs counter to the Islamic vision of a just and exploitation-free economic and social order. Referring to Verse 276 in the second chapter of The Holy Qur‘an [Al-Bagarah 2:276] the Shari‘ah states clearly the direction of the resource. It must come from the rich to the poor by way of charity, not the other way around through interest (Khan 1983). The above verse conveys to us that Allah is making it clear with a decisive refutation of those who say usury is prohibited only if the sum paid back is doubled and multiplied, because Allah made lawful only the retrieval of the capital without any addition, Riba is a major sin, as proven by statements of the Prophet Peace Be Upon Him}. “Stay away from the seven destroyers.” They asked, “What are they, O Messenger of Allah?” He said “Ascribing partners with Allah; witchcraft; killing the soul, which Allah has prohibited except for just reasons; consuming Riba; consuming the property 179of an orphan; running away form the battle; and slandering chaste, believing women who are unaware of the possible misinterpretation of their innocent but indiscreet acts.” ‘The Prophet cursed the one who consumes Riba and the one who pays it, and the scribe who writes the contract, and the witnesses to it; and said, “They are equal (in sin).” (Jamil Zeno 1996:233) Let us consider that some of the wisdom behind the prohibition of riba is because of the harm that it can cause in the society—economically, socially, and morally 1. Riba sows the seed of enmity between individuals and destroys the spirit of mutual help and aid between them. 2. Riba leads to the formation of a leisure class, which does no work at all, yet money piles up and is concentrated in their hands with no effort on their part, so that they become the economic equivalent of parasites, who grow, and relish at the expense of others. 3. Riba bas been and remains a major instrument of colonialism and imperialism (in fact of neocolonialism), it is said that imperialism follows in the wake of traders and priests. (We have known the damage of usury in some countries’ colonialism). 4. Riba is the appropriation of people’s wealth without compensation, which is prohibited, as the Prophet said, “Verily, your blood and your wealth are inviolable (among yourselves).” (Jamil Zeno 1996:233-4) Islamic banks go about their business and perform their activities without paying or receiving interest, but they do collect minimum charges or fees for services—such as cash documentary letters of credit. Islamic banks use different methods to accomplish their business goals than conventional banks. Leasing (ijarah) is one such way, and the principal of profit and loss sharing (PLS) is yet another. The IDB in Jiddah believes that it follows the Islamic Shari'ah. 180Islamic Development Bank In addition to the Saudi Fund for Development (SFD), the OPEC Fund, and the BADEA, as discussed in Chapter IV, for providing economic assistance to SACs, another multilateral institution is the IDB. The Saudi government subscribed for a share of 26.3% of its capital in the amount of 1D997.17 million (Islamic Development Bank Annual Report 1997) (Table 22). ‘The IDB was established by the First Conference of Finance Ministers of member countries of the OIC, held in Jiddah, on 24 Dhul-Qi’dah 1393 AH (December 18, 1973). The [DB formally commenced its activities on October 20, 1975. The objectives of the IDB are to finance productive projects and programs in both the public and private sectors in member countries. It invests in economic and social infrastructure projects, provides technical assistance to member countries, and assistance in the promotion of foreign trade, especially capital goods (Oded 1986). The IDB is the only bank of its kind operating in Jiddah. It has many goals, such as removal of the burden of riba (interest) from the Islamic society, promoting ‘economic unity among Muslim states, and assisting Muslims in the development of their commercial and industrial potential. The IDB solicits funds and employs them in accordance with Islamic unity and insures justice. One of the major goals of Islamic banking in general and the IDB in particular is undertaking business and trade activities on the basis of fair and legitimate (halal) profit, giving zakat (charity), and prohibiting monopolies. IDB activities, however, are oriented more toward development projects of its member countries rather than toward commercial activities (Khan 1983:260). 181s )B Share Initial 1" Addition (aD malin) Source: IDB Charter 1998. 182There are more than 100 Islamic financial institutions in operation. The largest and most internationally active bank is Dar al-Mal al-lslami. Islamic banking is based on the teachings of The Holy Qur'an and the traditional sayings of Prophet Muhammad (Peace Be Upon Him}. An Islamic banking system attracted the attention of finance ministers from Islamic states that believed that it was good to have an Islamic institution based on the principles of the Shari’ah, which prohibits charging interest. The ministers decided to establish their own interest-free bank, the IDB, in 1973 with headquarters in Jiddah (Al-Suwaidi 1994). ‘The IDB provides alternative economic and financial mechanisms to those countries that are members of the OIC, to pursue economic programs that are divergent from some of the structural adjustment policies of The World Bank. The IDB was formed to foster economic development and social progress of member countries and Muslim communities individually and jointly, in accordance with the principles of the Shari'ah. The principal of profit-and-loss-sharing (PLS) (qard-hasan) or Islamic interest-free banking can replace interest and act as an instrument of monetary policy in a modem economy. Islamic banking applies the PLS principal in both assets and liabilities. In profit sharing or mudarabah, the bank buys a specified item for a client who agrees to pay the bank later, either in a lump sum or via installments, a price, including an agreed-on percentage of profit. Tools used by the Islamic banks to build their business deserve research on their own merit. Several tools used by the IDB will be discussed in this research, though not the full range of tools. 183All member countries of the OIC are eligible to become members of the IDB. A total of 51 countries spread over three continents (Africa, Asia, and Europe) are members of the IDB. The main shareholders of the IDB are Saudi Arabia, Kuwait, Libya, Turkey, and the United Arab Emirates. According to Article 34 of the ‘Agreement, each member shall have 500 basic votes plus one vote for each share subscribed. This is different from the OIC voting system of “one member, one vote.” ‘The IDB sells its shares to member countries; therefore, voting rights reflect the number of shares a member state owns. More voting power may influence IDB decisions in approving or denying money for development projects supported by a particular member state. Therefore, a relatively wealthy member state may influence the vote of a relatively poor member state, which in turn can influence an IDB decision. Voting rights at the IDB definitely influence the appointment of high ‘executive positions at the IDB. Ever since the IDB’s creation, its president has been a Saudi citizen, which is not the same case at the OIC (one member, one vote). This has been possible because Saudi Arabia has bought the largest amount of shares in the IDB. The four largest contributors to the bank are Saudi Arabia, Libya, the UAE, and Kuwait. They committed themselves to two-thirds of the subscribing capital and they hold 50% of the voting power in the bank. Arab countries as a whole control 80% of the voting power (Oded 1986). The voting power on the board of governors is decided by a majority of the voting power represented at the meeting. The role of the IDB in non-Arab Islamic African countries reaches the real target or the grass roots, even though their shares are low (Table 22). The non-Arab Islamic African countries are those countries where the majority of the population is 184Muslim. There are other non-Arab African countries that have Muslim minorities, where Muslims make up one-third of the population or less. The IDB concentrates on Muslim countries because members of the bank have to be a member of the OIC, which is the House of Muslim countries around the world. Yet, the bank has financed several development projects of non-member states, especially in SSACs; e.g, development projects in Kenya (Yusef 1990). ‘The IDB recognizes the strategic need to alleviate poverty in member countries and makes efforts to finance projects in the most needy of the less-developed Muslim countries. The IDB selects a variety of projects that it considers will alleviate poverty, such as primary health care, elementary and vocational education, agricultural development, water supply needs, etc. These projects are intended to improve the living conditions of the poor and create employment opportunities. The IDB has different financial assistance mechanisms available to it than do commercial banks, such as profit sharing, leasing, investment sales, and loans for construction projects of an infrastructure nature The main purpose of the IDB is to foster the process of social and economic development among its member clients, which are various governments. The IDB deals with both the public and private sectors, unlike the SFD which deals with governments only. Following are some of the Islamic tools used by Islamic banks and the IDB to help member countries attain self-reliance. Loan Financing Loan financing is the main form of IDB financing and is extended mainly to public sector projects in less-developed Muslim countries. Loan financing comes 185mainly from its ordinary IDB capital resources and from “special accounts for less- developed Muslim countries.” The repayment period for ordinary loan financing is between 15 years and 25 years, including a 3-year to 7-year grace period. IDB loan financing from the “special account” has a repayment period of over 30 years, including a 10-year grace period. In 1977, a total of 33 loans were approved for 20 member countries for 1D131.44 million (US$186.64 million) (/DB Annual Report 1997) (Table 23). Technical Assistance Technical assistance is another mode of financing for development projects. IDB financing activities are complemented by technical assistance operations provided to member countries to facilitate project management and capacity building. Technical assistance is provided in the form of a loan or a grant or a combination of both. In addition, other types of technical assistance are provided, such as workshops and seminars through the Islamic Research and Training Institute (IRTI). During 1417 ‘AH (1997), 16 operations amounting to IDS.65 million (USS7.82 million) were approved. From its inception in 1975 to the end of 1997, the IDB approved a total of 223 technical assistance operations worth [D77.23 million (US$95.53 million) to 43 member countries. Table 24 shows some of the SSACs benefiting from technical assistance projects in 1997 (IDB Annual Report, 1997). These projects were concentrated on reducing poverty, aiming to help poor people develop self-reliance so they could earn income to support their families. 186Table 23 nt Bank jects Ay 1997 Project From Ordinary Capital Resources Burkina Faso Agricultural development downstream of small dams Cameroon Creation of 400 productive boreholes in 7 provinces Comoros Petroleum storage facilities Moheli (additional 1) Construction and equipment for Franceville secondary school Assistance in the health sector Educational project If Extension of Timbuktu Airport phase II Agriculture development in Madina Pete area npevo-Gurue Road. From the Special Account for Less-Developed Muslim Countries Benin Reconstruction of social infrastructure destroyed by flood Gambia Assistance in the health sector Burkina Faso Agricultural development downstream of small dams Guinea Educational project Il Guinea ‘Creation of 360 productive boreholes with hand pumps Maldives Male primary school Mali 100 water points-Kayos and Koulikaro Mauritania Tichitt integrated development project Senegal Training/integration scheme-Arab ‘Source: IDB Annual Report 1998 Of a total of 51 IDB members, 21 are classified as LDCs, of which 17 are in Aftica, Among them are Benin, Burkina Faso, Chad, Comoros, Djibouti, Gambia, Guinea, Niger, Somalia, and Uganda. During 1997, the IDB approved from its ordinary capital resources 11 loans amounting to [D60.52 million. Also, during the 187same year, the IDB approved 35 operations from its special account valued at ID60.38 million (US$85.18 million) (IDB Annual Report) Table 24 sistance O; i 1997 1D USS in miltions) (in millions) Construction of small water retention dams Feasibility, Lalara-Makokou Road Feasibility/detailed design and tender documentation for secondary vocational schools Study on ESITEX school Study of Nouakchott water supply Feasibility study, Atar-Tidjikja Road Engineering study, Diouk-Kiffa Road reconstruction Source: Anmual Report, 1998 The IDB has helped many African Muslim communities from non-member countries as well. One IDB project is to provide scholarships. Some of the African non-member countries benefiting from educational scholarships include the Congo, Céte d'Ivoire, Eritrea, Ethiopia, Kenya, Lesotho, Nigeria, Zaire, and Zimbabwe. Leasing ([jara) Leasing is another Islamic tool that the IDB uses in both the public and private sectors. Leasing is a medium-term mode of financing for rental or purchase of capital equipment and other fixed assets for a specific time period. The IDB then retums the ownership of the assets. Capital equipment includes plants, machinery, and equipment for industrial and agro-industrial infrastructure, transport areas, etc. Lease financing is also provided for acquiring ships, oil tankers, and fishing trawlers. After the end of 188the rental period, the bank transfers ownership of the equipment to the lessee as a gift (Question and Answer, 1992). The repayment period is between 7 years and 15 years, including a two- to four-year grace period. The normal ceiling applied to lease operations is 1D20 million per project (Annual Report 1997). IDB Educational d Scholarship Program The IDB supports a merit scholarship program for member countries as well as for poor countries around the globe. The program's aim is to develop technical and scientific skills in those nations that cannot afford to provide such skills. The areas for training range from lasers to fiber optics and environmental protection. The scholarships support a three-year program for a doctorate with one additional year for post-doctoral research. The program began in 1990 with a total budget of USS9.2 million to train approximately 80 scholars. The second phase of the program covers the period 1997 to 2001. More than 35 member countries have benefited from this program, including Burkina Faso, Cameroon, Chad, Gambia, Guinea, Maldives, Mali, Mauritania, Niger, and Senegal. The IDB has also provided scholarships to non- member countries, especially to poor Muslim minority populations. This program focuses on medicine, pharmacy, dentistry, engineering, and agriculture. Scholarships are awarded to academically meritorious and financially needy Muslim male and female students. The requirements of the scholarship are that the candidates must have completed their senior secondary education and must complete and submit the proper application forms, which are available from any IDB office. Benefits include a monthly allowance for clothing, books, and other school materials. In addition, the IDB pays all student tuition fees and costs for medical treatment. Non-member 189countries that have benefited from this program include Eritreia, Fiji, Ghana, Kenya, Malawi, Mauritius, and Togo. IDB Participation in the Sacrificial Meat Utilization Project The IDB also participates in the Sacrificial Meat Utilization Project of the Kingdom of Saudi Arabia. The bank continues to cooperate closely with the government of Saudi Arabia in implementing this project (Hadi and Adahi). The main objectives of this project are to serve Muslim pilgrims by facilitating the performance of their religious rites and distributing meat to the needy in member countries as well as to Muslim communities in non-member countries. The government of Saudi Arabia helped IDB and pilgrims by installing four fully equipped slaughterhouses costing about US$125.33 million. The sacrificial meat is distributed to Muslim refugees and the poor, mostly in SSACs. The frozen meat is shipped by sea, land, and air to the various countries. The total amount of sacrificial meat from the beginning of the project in 1403 AH up to 1416 AH (1982-1995) reached about 5.595 million sheep and over 62,000 camels and cattle (Table 25). A review of the projects approved for financing and the countries that were assisted from January 1976 to May 1997 shows that the IDB provided alternative financial assistance to many SSACs. This, in turn, helped the countries alleviate poverty and reduced the risk of dependency on commercial banks that charge high interest rates. The IDB, of course, operates according to Islamic law and is therefore not allowed to charge interest. 190Sacrifici istributi ym, 1991-1997 Number of Sheep Distributed 1992 1993. 19941995 _ 19961997. Transport 4835 $000 5,000. 3.318 4,360 5,000 5,000 2,500 10,00 7,000 7,000 6,000 5,000 5,000 5,000 5,000 5,000 5, 4,700 Frozen, by sea/air Frozen, by sea Frozen, by sea/air Frozen, by sea Frozen, by sea Source: IDB Annual Report, 1999. ‘The IDB has helped many Muslim societies in non-member African countries with grants and donations for educational and vocational training programs, as well as aid to the victims of floods and droughts. The IDB provided a donation of USS317 191million to the victims of the drought in northern Kenya to dig 37 deep wells and create six artificial lakes to store rainwater for more than two million people in six northern Kenya provinces. The IDB also donated USS300 million to people living in the ‘Alawjadeen Province in south Kenya. This donation was to dig 60 wells to provide water for about one million people. In addition, the IDB donated US$345 million to build Islamic schools in Lome, Togo, to increase the number of Muslim students from $50 to 1000 (Al-Jazirah: http://www.aljazirah.com/1999/ Jan/gfx/16/p. 26201.hth). The role of the Kingdom of Saudi Arabia in helping SSACs through the IDB comes from its large share in the IDB capital base, 26.3%. In other words, Saudi Arabia has a strong influence over many IDB member countries due to its large contribution and, as a consequence, its voting power influences the outcome of IDB decisions. Muslim World League In addition to the OIC, Saudi Arabia provides cultural assistance to Muslims around the globe and to African Muslims in particular through the MWL. The MWL is older than the OIC; it is an international, non-governmental, Islamic (non-partisan and non-sectarian) organization representing Muslims around the world. The supreme ‘organ of the MWL is its Constituent Council, with headquarters in Makkah. The Council consists of over 60 members representing Muslims from around the world. New members are added from time to time on the approval of the Council (World Muslim Gazetteer, 1985). It was established in 1381 AH (May 1962) as a result of consultations between Muslim scholars and thinkers and the political leadership of Saudi Arabia and other Islamic leaders. 192In earlier times, it was primarily merchants and individual religious scholars who spread the word about Islam, i.e., people for whom the spread of Islam was not their main or sole task. These merchants were not centralized in organizations However, today, several Arab countries devote special attention to Islamic missionary efforts, among them Saudi Arabia (Oded 1986). Saudi leaders and Muslim scholars realize the obligation on Muslims to become one Ummah (nation) by uniting under the umbrella of Islam. They founded the international non-governmental Islamic organization to serve the Ummah, or Muslim nation. Muslim scholars and leaders follow what Allah, the Almighty, commanded in The Holy Qur ‘an. “Help each other in (Birr) piety and (Taqwa) righteousness; but do not help each other in sin and transgression. And fear Allah. Certainly, Allah is severe in punishment.” (Surah Al-Ma’idah 5:2) (Translation of the Meanings of the Noble Qur'an, M. Khan and M. Hil lal. Faced with the challenge of Arab nationalism and revolutionary Socialism represented by Egyptian President Nasser, King Faisal came forward with the idea of Muslim unity based on the concept of the Ummah. Also, King Faisal’s objective behind the establishment of the MWL was to fight secularism in the Arab and Muslim world, Although the MWL faced difficulties in the beginning, as most new organizations do, Faisal continued his efforts to bring about a Muslim state based on the Sunnah as opposed to secular ideas. Arguing the legitimacy of his efforts, the King is reported to have said: tis in these moments when Islam is facing many undercurrents pulling Muslims left and right, east and west, that we need time for more cooperation and closer ties to enable us to face all the problems and difficulties that obstruct our way as an Islamic nation, believing in Allah, His Prophet and His laws (Al-Ahsan 1988:17), 193‘The MWL does not interfere in the internal affairs of a country. The main objective of the MW is to convey the correct message of Islam and to expand Islamic principles and teachings. Another aim of the organization is the extension of educational, cultural, social, and health services to Muslims around the world. Its goal is to further the interests of Muslim communities and to defend them. MWL operates in Africa under Saudi support. It deals chiefly with establishing Islamic centers and with organizing courses for religious leaders. The MWL has a special body operating in Africa called the African Council for Islamic Cooperation and Coordination. The second conference of this council, held in Dakar in 1981, was chaired by the president of Senegal, Abdou Diouf. Representatives of 15 SSACs including, Mali, Gabon, Gambia, and Senegal, participated in the conference as well as Muslim delegates from South Africa. Resolutions were adopted that included ways of spreading Islam and the Arabic language and establishing institutions for this purpose in SSACs (Oded 1986). Many of the problems occurring in African Muslim countries concern the treatment of the family, which is so frequently misunderstood and misperceived by the Western world. The lavish spending and first-class treatment of parents, spouses, children, and relatives is imperative. Allah has ordered Muslims to respect and honor the family: ‘And your Lord has decreed that you worship none but Him, and that you be dutiful to your parents. If one or both of them attain old age in your life, do not say to them the slightest word of disrespect, nor raise your voices to them but address them in terms of honor. 194‘And lower to them the wing of submission and humility through mercy and say: “My Lord! Bestow on them Your Mercy as they did bring me up when I was young.” (The Holy Qur'an 17:23-24) Also, Allah continued as follows: ‘And give to kinsman his due and to the masakin (poor) and to the wayfarer. But spend not wastefully (your wealth) in the manner of the spendthrift. Verily, the spendthrifts are brothers of the devils. ‘And the devils are ever ungratefl to his Lord. (The Holy Qur'an 17:26-27) Allah organized family status through Islamic law. This perfect divine organization ensures happiness for those who adopt it. ‘According to Dr. Abdullah Omar Nasseef, a former president of the MWL, the Saudi government contributes more than 90% of the MWL budget. The MWL is considered the first non-government Islamic organization in terms of the importance and progress made to Muslims. The MWL is a member of NGOs of the UN, UNICEF, UNESCO, and the OIC (Nasseef 1999). Saudi Arabia provides many different types of support to Muslims in SSACs through a variety of instruments; the MWL is one of the most important ways. Other significant efforts being made by the Saudi government include distribution of The Holy Qur'an in different languages, building Islamic centers and mosques, serving the pilgrims during the Hajj, providing grants and assistance to Muslim minorities, and using the media to properly defend Islamic morals and teachings and Muslims. The Saudi government's yearly contribution to the MWL budget is a grant of US$21.33 million, which covers the expenses of salaries, Islamic call to guidance (Da'wah), and MWL centers around the world. In addition, the Saudi government provides an annual assistance of US$5.33 million to the Mosque Fund of the MWL. Saudi citizens, 195including members of the Royal Family, scholars (lama), and Saudi businessmen are all major contributors to the MWL. Total spending of the MWL since its establishment is approximately USS1 <6 billion (Al-Obeed 1999). Sheikh Al-Obeed, the President of the Muslim World League, describes the responsibilities of Saudi Arabia toward Muslims around the globe, and in Africa in particular. He notes that Saudi Arabia was responsible for establishing the OIC and the MWL. These organizations are hosted by and depend on Saudi support, politically and economically. One of the more important aspects of Saudi Arabia’s cuttural policy in Africa is promoting Islam. Saudis strongly encourage Africans to perform the Hajj, one of the five required pillars of Islam. In some cases, the Saudi government has specifically invited Aftican Muslims to come to Makkah to perform Hajj, by providing all expenses such as accommodations and transportation, through organizations such as the OIC and the MWL. Thus, there has been an increase in ‘African pilgrims coming to Makkah for the Hajj, and this is considered an important factor in sharing Islam among African Muslims (Alobeed 1999). ‘Also, the vice president of the MWL, Sheikh Aloboody, highlighted the Saudi Islamic policies in Africa, which are given much attention by the government. Saudi ‘Arabia receives African youths for education and then sends them back to their own countries where they can help their communities. Sheikh Aloboody has conducted several trips to Affica since the early 1970s to evaluate Muslim needs so that the Saudi ‘government could provide help. He notes that Saudi Arabia sponsors 11 units for the call to Islam (Da'wah) in Gambia, 10 from the Dar al-ifta, the Islamic Guidance Unit, and one by the MWL. African scholars have continued to express their thanks to the 196Saudis for their continued support of their Muslim brothers and sisters in Africa. ‘Among those scholars are Sheikhs Hatab Shareef, Ibrahim Gola, and Othman Gaab, and African scholars and presidents of the Islamic Solidarity offices in Gambia and Sierra Leone (Aloboody 1985:27-87). Aloboody also discusses opening an office in several African states with high African officials and the Muslim situation with tribal leaders. Most African leaders have given permission to the MWL to open an office so they might provide assistance to them, and even privileged MWL officials with diplomatic immunity, such as the president of the Ivory Coast, Saidy Zorobow (Aloboody 1991:85). Saudi diplomatic officials are also involved in Muslim and African solidarity Prince Salud Al-Faisal, the Foreign Minister of Saudi Arabia, called for a conference of Muslim minority countries. Due to the Saudi responsibility toward Muslims minorities, they were invited to Makkah in August 1991. The purpose of this conference was to strengthen ties among Muslims, to determine the problems of minorities, and to recommend practical measures to resolve these problems (Islamic Summit 1991, Istanbul, Turkey). Several African scholars expressed their enthusiasm for and appreciation of the Kingdom for supporting them, including Dr. Abdul-Lateef Al-Ketani, president of the MWL in Central Africa; Manghao Mukhtar Cisse, President of the MWL; and the former President of the AMSA in England and Ireland (‘Jaridet Akhbar Alalem Aleslami,” MWL Newsletter 1126, 1991 (9/2/1412 AH) Saudi Assistance Delivered Through the MWL The Kingdom of Saudi Arabia provides educational assistance to Africans by sponsoring many scholarships through the MWL and several Saudi universities, such as the Islamic University in Madinah. In addition, Saudi Arabia has opened and fully 197finances schools and cultural centers in many SSACs, such as the Islamic University in Niger for US$14.9 million and the Islamic University in Uganda for USS8.0 million as mentioned earlier (Sahh 1999). The MWL provides scholarships for Muslim students (male and female) at various educational levels. In the 1996-1997 and 1997-1998 school years, over 1,100 and 556 students, respectively, received full scholarships from the MWL. A total of USS1.076 million was spent on scholarships during the period 1996-1998. Students from Muslim minority communities or newly independent countries, such as many SSACs, are given priority in the selection of scholarship recipients (Muslim World League Report, Makkah, Saudi Arabia, 1999), In addition, the MWL coordinates efforts in the field of Da'wah (conveying the message of Islam) and encourages Da'wah workers, providing them with both moral and material support. The MWL has 1,131 Da'wah workers in 113 countries around the world, with 503 working in 44 African countries. Their main job is to share the proper Islam based only on the teachings of The Holy Qur'an and the Sunnah (way of Prophet Muhammad {Peace Be Upon Him}) in their own countries. The MWL is responsible for their salaries and finances in general. Since Saudi Arabia established the MWL, its host countries depend on Saudi’s support politically and economically (Aloboody, 1999). The Saudi government pays great attention to SSAC minorities, in particular. In addition to economic assistance to SSACs, the Saudi government itself sponsors educational scholarships. Saudi Arabia has provided approximately 5,000 scholarships at a cost exceeding US$114.4 million for students to attend Saudi 198universities as well as institutions in other countries. The government provides tuition, a monthly stipend, health care, accommodations, books, fees, and a round-trip ticket between the student's home and the school they are attending. The Islamic University in Madinah opened its doors to non-Saudis from Muslim countries in the early 1970s, accepting 15% Saudi and 85% non-Saudi students (ALRiyadh 1107, 11, 1990). Saudi Arabia also provides financial assistance to more than 875 Islamic associations and 210 Islamic centers around the world, with some in Africa, including the King Faisal Centers in Njamena, Chad, and Conakry (A/-Riyadh). In addition, the Saudi government sends Saudi teachers to SSACs to educate indigenous Muslim minority Africans in several fields, especially the Arabic language and Islamic principles. The Kingdom also finances the Kisauni Institute in Kenya with an annual donation of US$80,000. Saudi citizens have also given money to support school projects, institutions, and orphanages in Africa (Al-Sallom 1997). However, as discussed in Chapter IV, Saudi cultural assistance to Kenya declined dramatically after the US embassy bombing for which the US government accused a Muslim group. Furthermore, the MWL sends a number of preachers and teachers to African countries, In 1985, 25 university scholarships were granted to Kenyan students. The MWL arranges lectures and discussions on Islam and contemporary Muslim life. Following every annual session of the Constituent Council of the MWL, an Islamic seminar is held at its headquarters in Makkah (World Muslim Gazetteer, 1985). Education is a major element of Saudi assistance provided to SSAC. Nyang (1982) notes that Saudi Arabia sends educated young Muslims only to African countries, which allow Da'wah. He also notes that this investment in African youth 199communities is predicted to succeed, because education is an investment in the Muslim African interest. In the mid-1980s, Saudi Arabia gave USSI million to Howard University, Washington, DC, for the purpose of establishing an Arabic and Islamic Center. However, this project is yet to be implemented. Over the last 20 years, enrollment of Saudi students at Howard University has increased, with a number of Saudis receiving their graduate degrees from the university. It is in this connection that one can appreciate the fact that His Royal Highness, Prince Bandar Bin Sultan Bin Abdul-Aziz, the Ambassador from the Kingdom of Saudi Arabia to the United States, received an honorary degree (Doctor of Laws) at the graduation commencement ceremonies for the Class of 2000. Prince Bandar was also a key figure in resolving several African civil wars, such as that in the Sudan. Prince Bandar and Nelson Mandela were involved heavily in resolving and removing the sanctions against Libya because of the Lockerbee airplane bombing problem. Prince Bandar has been a key figure in Saudi Arabian foreign policy since King Fahd, assigned him to several peace deals, including the Middle East peace process. He also played an important role in the Madrid summit in 1992 between Palestine and Israel. Through his foreign policy efforts, relations between the Kingdom and several SSACs are moving toward completion. Islamic Relief Organization The Islamic Relief Organization (IRO) is part of the MWL and was created in 1398 AH (1978). The IRO works to help poor people and provides charity anywhere in the world by providing various types of foodstuffs, medicines, and other forms of material aid to Muslims. The IRO has spread into 60 countries around the world, 200covering Mustim countries and minority Muslims in non-Muslim countries. The IRO focuses on SSACs because they have such humanitarian tragedies, including famine and food shortages. It has helped Muslim minority communities by providing health services, such as small portable clinics, and medicine. It also sponsors the education of Muslim Africans in Saudi universities. For example, it sponsored 27 teachers in Ethiopia in 1992. In addition, IRO has been helping poor African people especially in areas where poverty is widespread, by building residences for orphans in many SSACs where Muslim minorities live. It also provides economic aid to Muslim refugees in SSACs, such as Somalia. The IRO sends preachers and teachers to these refugees camps to educate young Muslims to learn Arabic and to learn and memorize The Holy Quran (Muslim Minorities in Africa, 1992). World Assembly for Muslim Youth ‘The World Assembly for Muslim Youth (WAMY) is an independent agency acting as an Islamic forum coordinating efforts to unite Islamic youth associations as well as students around the globe. The main objective is also to protect young Muslims from destructive trends. WAMY tries to clarify the Islamic vision, which is based on The Holy Qur'an, the teachings of Prophet Muhammad {Peace Be Upon Him}, and the Sunnah. ‘They are building unification and brotherhood among Muslims. There are a number of youth organizations working around the world under the umbrella of the MWL in Makkah. WAMY sponsors many youth campaigns in several countries to enhance the unity of young Muslims. WAMY operates out of Riyadh. 201WAMY is very active in helping African Muslims to unite. One of the major keys in cementing unity among Muslims is building mosques. In 1998, WAMY built 15 mosques in several African countries, including Senegal, Mali, and Eritrea Additionally, in 2000, WAMY built 12 mosques in Guinea-Bissau, all the contributions coming from Saudi citizens (A/-Jazirah 2000). According to the WAMY charter, its mission is to: 1. Serve the true Islamic ideology based on Tawheed; 2. Consolidate the factors of ideological unity and strengthen the Islamic fraternal relationship among Muslim youth, 3 Introduce Islam to the world using all available means; 4. Crystallize and support the constructive role of youth and students in developing a Muslim society that is based on the true Islam; and 5. Assist Muslim youth organizations all over the globe through effecting coordination in their activities and helping them implement their Projects. Conclusion In the 1960s, most Muslim countries, and especially African countries, had just gotten their independence from Western colonialism. Colonial countries dominated and controlled many African countries—politically and economically—as well as cultural aspects. They mercilessly exploited African natural resources. The Western colonial powers forced African countries to adopt their ideology and religion, creating alternative belief systems where Islam had previously existed. During the colonial period education was an effective tool of Christian missionaries. Muslims suffered from an education gap, which made their position weak and encouraged them to increase their activity especially in primary education. This is also true at the present 202time for many Orientalists who study Islam. They tend to bring only one-sided views, which do not favor Islam. In some parts of Africa, missionaries were considered allies of the colonial state. It has been argued that missionaries constantly speak against the African culture and rarely listen to the warnings of the faithful. Thus, when independence came, it was feared that the Church might disappear. Colonialism attempted to weaken Muslim nations—their politics, economies, and most importantly, their culture. This eventually resulted in disarray of the Muslim sense of unity, known as Ummah. Saudi leaders view the OIC and the MWL as tools to promote cooperation among Muslim countries, eliminate the Communist and Soviet influence, and mobilize ‘Muslim states to be independent. In sorae instances, Saudi leaders have succeeded in transforming the Arab-Israeli conflict into an Islamic-Israeli conflict. Therefore, an Islamic-Israeli conflict is an important factor in the Saudi foreign policy towards the SSACs. By distributing grants, giving financial aid, donating books and The Holy Qur ‘an, sending delegations of religious leaders to Africa for short stays, especially in Ramadan, and inviting African non-Muslim people and leaders to Islam as well as to visit the country, Saudi Arabia seeks to influence Africans and to support Islam. For example, Saudi Arabia invited the vice president of Tanzania, Aboud Jumbe, for Hajj in 1983; he is the most active African leader in strengthening African-Arab ties. He requested aid for Tanzania by saying that 55% of Tanzania’s population is Muslim and that the reminder is rapidly converting. During his visit, an agreement was reached to open a branch of the MWL in Dar es Salaam. As an effort for establish the 203importance of Istamic education programs in Africa, it has influenced some African leaders to adopt Islam as their personal faith. In the modem period, Afticans and Saudis have cooperated politically and economically, especially with regard to the issue of cultural assistance. This cooperation has been partly enhanced and facilitated by the OIC and the MWL and partly by efforts of the IDB. The establishment of Muslim organizations such as the MWL and OIC in 1962 and 1969, respectively, is vital for Muslims around the world. Yet this could happen only under the condition that these two non-governmental organization are given full support from Muslim individuals as well as governments. The establishment of the OIC reflects the desire for unity among Muslims, where the Ummah is believed to have major political significance. Its establishment is significant because it mitigates the rising role of secular ideas in Muslim society. The OIC is important because it assists the sense unity in all Muslim-majority nations. The OIC has been more successful in fostering economic cooperation among member countries than in dealing with political issues. The Islamic Development Bank has initiated development programs for economic cooperation among OIC member states. ‘The IDB has financed numerous development projects that foster closer trade relations among member countries. Despite the fact that Arab countries as a whole control 80% of the voting power, African criticism is often heard concerning the gap between the aid granted to Affican countries and the aid granted to Arab countries. The main objectives of Islamic banks as discussed in this chapter are prohibiting riba (interest) and practicing Islamic economic tools, such as leasing and loan financing, The trend now has gone to the Islamization of the imported Western financial institutions in both 204individual and governmental transactions. Some Islamic countries have Islamized their financial systems, including Iran, Pakistan, and Sudan. The IDB is one of the Islamic development banks that SSACs have benefited from through developmental projects, scholarships, and the sacrificial meat distribution program. Furthermore, the OIC program for establishing universities and Islamic centers seems to be a positive step in the process of enhancing Ummah consciousness among member states. The intention to sponsor schools to teach the Arabic language as the universal language of The Holy Qur'an around the globe is expected to help bridge cultural differences within Ummah. As discussed in this chapter, education has been given more emphasis in the Saudi Arabian cultural policy. It is implemented through the OIC, the MWL, and Saudi universities. After a long period of African colonialism, Saudi Arabia has decided to bring Islam back to the region by playing an active role in Islamic affairs. Saudi policies are suppose to accomplish this by sending preachers and teachers, building Islamic centers, providing scholarships, and through its influence in the OIC and MWL. Saudi Arabia’s financial assistance to the OIC and the MWL has contributed to enhancing their presence globally. Although most of the Saudi financial aid goes to Muslim countries as bilateral agreements, there is evidence that it has supported non- ‘Muslim governments as well. Saudi Arabia's conditions for foreign aid are that the receiving country must cooperate with Muslims in that country and at the same time improve their standard of living ‘Muslim countries are generally caught up in their own poverty and internal violence. It is hard to understand why a nation (Islam) with more than one billion 205people living around the globe could not take a united action against poverty and violence. There were more intra-Muslim conflicts within and between Muslim countries than there were between Muslims and non-Muslims. They are passive and helpless when many people suffer from poverty and civil wars. tis believed that if the modern generations do not grow up under the influence of the teachings of Islam, and adhere to The Holy Qur'an and the Sunnah, they will find themselves violating their moral and ethical codes. Islam offers continuation and references that adapt to a changing environment. It is a way of life for believers. Even though Saudi Arabia “floats” on a sea of oil, Hajj has always been an alternative source of revenue and economic power. Makkah, and Medinah will remain the Islamic epicenter. At least once in the life of every Muslim living on this earth, Allah requires him or her to visit the two holiest places of Islam—Makkah and Medinah—in Saudi Arabia. This visit has economic and spiritual implications. It links Saudi Arabia with the rest of the Muslim world on the one hand, and provides the Saudis with trade and financial connections, on the other. Thus, Saudi Arabia will achieve her economic, political, and strategic successes. Saudi Arabia also has an unlimited resource that takes priority over all of these other matters of state. It looks for the support of over one billion people that ‘grows stronger every hour. It counts Muslims as a resource of love, dedication, and devotion to the nation that continues to protect and serve the millions. So countries, policies, strategies, coups, takeovers, tyrants, even economies, can all come and go, but Islam remains a strong force in Saudi Arabia that will contribute to its civilization and existence as a world power in development and cultural assistance. 206CHAPTER VI. CONCLUSION This dissertation has endeavored to establish that, while there exists a solid relationship between the Kingdom of Saudi Arabia and sub-Saharan African countries based on political, economic, and cultural backgrounds, there also exists a gross misperception in Wester societies as to the reasons and motivations behind this relationship. It must be taken into consideration, as a part of the overall analysis, that the manifestation of this relationship and its reflection on Saudi Arabia's foreign policy have been discerned through a number of variant expressions. The government of Saudi Arabia and its citizens have established and cemented a unique relationship with sub-Saharan African countries through development assistance along with religious and cultural factors. This work is the first scholarly attempt to describe development and cultural assistance from a relatively less-developed country to a region which is also considered as less developed. The focus of this dissertation has been to describe and analyze facts and figures from the donor's perspective rather than from the perspective of recipient countries. The findings demonstrate differing dimensions of bilateral relationships. Any study on relationships among varying societies would obviously include consideration of various internal factors such as geographic location, political system, national beliefs, cultures, the size of population, economic and military capabilities, and history that determine a country’s foreign policy behavior. However, in order to present a truly comprehensive understanding of the motivational factors involved in Middle East policy development, especially in Muslim countries like Saudi Arabia and others in Africa, the study explores national interests and concerns regarding regional 207stability and its connection to Islam. In this respect, Saudi Arabia's development assistance reflects the country’s concern for regional stability, Arab interests, and its affinity to Islam. This study has described how Saudi development assistance -is highly ‘motivated by its attachment to Islam as the primary vehicle for accomplishing Saudi foreign policies. Chapters IV and V show how Islam plays a major role in Saudi Arabia’s foreign policy. Most Saudi economic, political, and cultural as: passes through various bilateral and multilateral agencies to help major Muslim African countries. This approach also serves as a tool to accomplish Saudi foreign policy in development assistance and cultural assistance. Moreover, Saudi Arabia has effectively mobilized its public and private sectors. Translating Saudi development assistance into influence has been successful to some extent, especially with sub- Saharan African countries, when it involved numerous government agencies on both sides. Thus, the success of development assistance also depends on the special roles of institutions in recipient countries, implementing and managing external assistance. In the absence of this partnership between recipient and donor country, many obstacles will hinder progress to their mutual interests. Chapters IV and V discuss Saudi development assistance, which could be called a vital non-military instrument of Saudi Arabia’s foreign policy. Saudi Arabia is not a superpower like the United States; therefore, it focuses on non-military assistance components. Saudi Arabia’s major source of revenue is oil. Since oil is a strategic resource and the country’s main provider of national income, any change in the price of oil or the capacity of production has a direct impact on Saudi foreign policy. In the 1980s, 208Saudi Arabia faced budget deficits due to major oil price drops; yet the country continued its development and cultural assistance to fulfill its commitment to serve Islam and present itself as a reliable source of socio-economic progress. Saudi leaders have used their capabilities and influence to resolve inter-Islamic disputes and cement Islamic and Arab solidarity wherever possible. Attempts to achieve these goals have often conflicted with internal security needs, regional stability, and concern for the safety of its petroleum exports. In the long run, unless there is a reliable assistance program to encourage development, regional political instability and a reduction of Saudi foreign aid would hurt Saudi national security. Regional relationships are closely related to the production of oil. At such times that the profits from the sale of oil increase or decrease, foreign policy and foreign aid can be accomplished easily or with difficulty. Internationally, when the price of oil and production increases, military spending and national security issues are stressed at the expense of other socio-economic priorities Saudi Arabia uses Islamic educational and humanitarian assistance in addition to development assistance. In other words, Islamic assistance in general is not only an alternative for implementing Saudi foreign policy; it is the major tool. Islam and ‘Saudi foreign policy have been discussed together throughout this study because Saudi leaders, as well as its citizens, consider that the propagation of Islam is indeed a valid common objective. Saudi Arabia has the ability to lead the Muslim world, as discussed in Chapter II. It is the heartland of Islam and its land holds the two holiest sites in the Muslim world—Makkah and Madinah. Needless to say, the only major income of Saudi Arabia comes from a non-renewable source—oil. Even though Saudi 209Arabia sits on a rich oil reserve, which, it is thought, will last for hundreds of years, the price of oil is not stable. Therefore, cultural assistance can be a vital alternative for implementing Saudi foreign policy. Through Islam and Islam-motivated assistance, Saudi Arabia can easily accomplish its foreign policies. All Muslim countries, as well as countries that have Muslim minorities, need Islamic assistance and spiritual knowledge whether they are rich or poor or whether they are American or African. This study shows that Saudi Islamic assistance is a permanent factor, unlike purely economic assistance, which is believed to offer only temporary relief. Chapter III discusses the effect of the “dependency theory,” its impact on less- developed countries and how it contributes to poverty in sub-Saharan African countries. Although recently the “underdevelopment theory” has declined in popularity, the slogan, “In order to be successful, copy the successful,” is not necessarily true. The fact is that one can develop one’s own knowledge and thinking without copying someone else's success. Third World countries can develop without totally changing their own cultures. The philosophical phenomenology or etiology says “either/or,” but we should move to “both/and.” One can become economically sufficient and not have to give up one’s own cultural values. In most of the Third World countries, only a few people take over or own most of the resources, and the majority of the population continues to live in poverty. Only a few people occupy or ‘own most of the natural resources, such as land, water, food, minerals, forests and control the physical resources, i.e capital outlays and human resources, e.g. cheap labor. 210The “dependency theory” encompasses many theories—Imperialism, Capitalism, Socialism, etc. However, there are some theorists who view the “underdevelopment theory” as classically Marxist, while other theorists view it as non-Marxist. The “underdevelopment theory” is an old theory that does not exist any more. Nowadays, there is no single center as such; the center has shifted to the G-8 counties. The newly emerging centers within the global economy vary widely. They include China, Germany, Japan, and the United States. The global economy is changing fast. For example, if war were to break out in the Gulf states—where 50% of the oil reserves are located—the whole world would be affected, regardless of where the center is. Thus, relations between countries now are not simply of the classical type; they take on different structures and configurations, Therefore, the world cannot afford a single, monopolistic theory; it has to be taken region by region or country by country. Chapter III describes the “vicious circle of poverty.” The vicious circle of poverty is the situation of the economies of developing countries. Weakness of investment incentives and balanced growth and determination of market size were also analyzed. External solutions, such as trade in the Third World, seem to focus on the foreign trade direction. Developing countries must have a variety of goods and services to export and not depend on just one cash crop that is susceptible to price changes. In addition, developing countries lose a lot of money because they do not use their resources for producing finished products, Most of the developing countries’ products are exported “as is,” with no added value to their products, which keeps the 2uprices very low. External and internal factors contribute to poverty in SACs. Extemal factors such as debt and foreign aid were discussed as well as internal factors of dependency, investment weakness, and market size. Both factors have a major impact on the political, economic, and social situations of the region. Debt as an external factor has contributed to sub-Saharan African countries’ poverty. Some developing countries acquire debt in the form of loans to import non- capital or consumer goods, such as military weapons or food for their people or luxuries for the rich, such as automobiles. This debt is not invested in capital goods but rather in daily-consumed goods such as food. The attitude of these governments seems to lead to a stagnating economy. ‘A number of concluding points have been made on the basis of the research presented in this study. They are intended not to attack foreign aid donors and their bilateral and multilateral institutions, but rather to understand their dynamics and to improve their effectiveness on SSACs. The objective of the study did not suggest ending foreign aid but calls for reexamination of priorities dispassionately, in order to improve its effectiveness. Throughout this work, there is plenty of evidence to suggest. that this is both possible and urgently required. Historically, an overview of Western foreign aid seeking to influence the recipient countries and people was not seen as a positive instrument to implement varying Western ideologies. Throughout this study, the foreign aid given by superpower countries, such as the United States, the former Soviet Union, France, and Great Britain, during the Cold War seems to have had limited effect on influencing recipient countries. It is worth mentioning that some African countries have played 212both sides of the political game, sometimes by appearing to accept Western democracy (Capitalism) and then sometimes adopting Socialism just to receive more aid and control political influence. Western countries helping African countries by providing loans assume they are helping these countries improve the people’s lives, but instead they have created a major debt problem resulting in highly-indebted poor countries. Foreign aid by multilateral institutions controlled by Western countries has been called the “New Colonialism”. Western foreign aid, misused by creating markets for the industrial nations, treats jobs and markets as a place to experiment with Western inventions. It tends to increase corruption, taxation, the prices for primary foodstuffs such as bread, and eliminates government subsidies on the basic needs of the people. In some instances, Western foreign assistance tends to help African leaders remain in power and increase the Africans’ pain. However, this important view is controversial and is not widely shared by some observers of the African scene. There is evidence that some of the Western countries’ objectives in providing aid are based on political interests and not on development objectives to eliminate poverty. There are some instances when the United States has given aid to many countries in order to maintain military strategies, influence UN votes, protect commercial interests, and coerce foreign policies to serve its objectives. For example, the United States gave aid to the Philippines as payment for maintaining US military bases there, but the US reduced its aid when the Philippine government refused to renew the base leases. Also, the US reduced its aid to Zimbabwe when the US government disagreed with Zimbabwe's vote in the UN in 1984. 213Opponents of US policies abroad have suggested that even the US Peace Corps, which has many volunteer programs, has been asked by the US government to leave countries whose governments disagreed with US foreign policy. The US cut off aid to Pakistan worth $600 million in 1990 owing to its fear that Pakistan had developed nuclear weapons. Western European countries such as France and Great Britain focus their foreign aid mainly on their former colonies, especially in Aftica. The British have focused on Anglophone countries and members of the British Commonwealth, while France has focused on Francophone countries. Westem countries have also used foreign aid to buy UN votes, protect commercial interests, influence governments, and put down adversaries. Industrialized countries also tie their aid to procurement of goods and services from the donor country. Saudi foreign assistance to Africa is equally vulnerable to such criticism. Opponents of Saudi foreign policy in Aftica might well argue that Islam is often used for political purposes and thus becomes subservient to foreign policy and political control. Tt has been argued that foreign aid should eliminate poverty and improve the standard of living of the poor by providing improved health care, education, and employment for needy people. Development assistance should diminish the need for further aid and dependency. This is what would make Saudi development assistance economically, politically, and culturally more beneficial for some African countries than Western aid, as discussed in Chapters IV and V. Saudi foreign aid does not require additional aid, nor does it create further aid dependency. 214This work has shown that it is not always necessary for foreign aid to be politically successful in influencing recipient countries. Currently, developing countries appear to be more opposed to the hegemony of the industrialized countries than ever before. The US and Western European countries have difficulty in being totally accepted in many Third World countries, and in some sub-Saharan African countries, in particular, regardless of the billions of dollars they have spent. There is the perception among certain Africans that foreign aid is used as a cover for neo- colonialism. The anti-colonial and neo-colonial sentiment among these Africans has occasionally surfaced as political crises. For example, America and the UN suffered a military failure in Somalia in 1992 because of Somali discomfort with American policy in their country. This led the Bush Administration to withdraw its troops from that country. Its opponents in Africa believe that the foreign aid is just another front for neo-colonialism intended to destroy the receiving or needy country. The debate about globalization has affected Africa more than any other continent. Aid from the West has created highly indebted poor countries (HIPCs), which places the future of these African countries in the hands of Western countries. ‘Chapters III and IV describe how African countries that have been receiving economic assistance for almost 50 years have seems to have little impact on the improvement in their economies or in the lives of their people. Chapter III draws the conclusion that the foreign aid given by multilateral and bilateral Western institutions created high debt and that foreign aid created a vast, untapped market for the industrialized countries. The real challenge now facing the world is that it must move from the old ideas of foreign aid as a short-term foreign 25policy tool to a more comprehensive approach. Donor and recipient must have a link that benefits both sides. In Chapter IV, Saudi development assistance to sub-Saharan African countries was discussed. Saudi Arabian development programs have been facilitated through national institutions such as the SFD and international institutions such as BADEA. Although Saudi Arabian development assistance was initially designed to help the poor in Aftican countries, it was expected to have more of an effect in changing their condition. Saudi Arabia feels its obligations toward African Muslims since it is the center of the Muslim world. Thus Saudi aid goes mostly to Muslim African countries. Saudi development assistance aid is biased toward assisting poor Muslims. This is more so when the aid is given by Saudi citizens and the IDB. By giving aid to Muslims in Africa, Saudi Arabia can accomplish its dual objectives of fulfilling its religious beliefs and realizing its obligations in promoting its, foreign policy. Foreign aid has been judged as useful by its proponents, and the government sends considerable foreign aid, especially to African Muslim countries. Africans prefer seeking aid from Saudi Arabia because of the notion that it serves the South/South relationship as a mid-level state that understands the less-developed ‘countries’ economic needs more than does the North/South relationship, mainly led by industrialized countries. Saudi Arabian development assistance is not meant to procure goods and services from the needy country; the only condition usually placed on Saudi aid is to ease the pressure on Muslims who succumb because of their poverty and human needs, especially if they are a minority in the receiving country. The literature shows that Saudi grants reach 90% of loans, depending on the economic 216situation of recipient country. Its also shows that Saudi Arabia has given 7% of its GNP, 100 times more than the amount suggested by the UN, which is 0.07% of GNP per country. Economic assistance given by Saudi Arabia, provided by a bilateral government aid program such as the SFD, multilateral agencies (e.g, BADEA and OPEC), or non-governmental organizations (e.g., WML) is motivated by Islam and, to some extent, humanitarian development assistance. As mentioned previously, Saudi Arabi is not a superpower country, nor is it an industrialized country. The out come of my analysis shows that Saudi foreign aid has made some impact on eliminating poverty by providing clinics and schools to people living in villages. It has made a remarkable difference at the grass roots level in eliminating illiteracy by providing scholarships, especially to the Muslim poor, and building Islamic centers to educate Muslim children in The Holy Qur'an and Islamic studies. ‘Saudi foreign aid as a part of its foreign policy goes beyond economic reasons. Saudi Arabia's foreign and cultural policy is highly motivated by Islam, to spread Islam through development assistance. From the Muslim perspective, this intention in and of itself makes it a success, to some extent, from the outset. In Chapter V, Islamic assistance to sub-Saharan Africa was discussed along with the accomplishments of Saudi Islamic assistance through several means, such as the Oorganization of Islamic Countries programs and through the Islamic Development Bank and the Muslim World League programs. A total of 870 Islamic associations and 210 Islamic centers are financed by the MWL and Saudi citizens who give money to support Muslims in Africa. The IRO and WAMY also play significant roles in connecting African 217Muslims with Saudi Arabia by sending preachers, doctors, and teachers and by providing shelters for orphans in many SSACs. In the year 2000, WAMY built 12 Islamic centers in Guinea-Bissau. It sponsored several youth organizations and camps to teach Islam as well as the Arabic language. Saudi Arabian development assistance has no economic strings attached to it and is not tied to acquiring raw materials or cheap labor. There are no economic benefits directly attributable to Saudi Arabia, since the Kingdom is not an “industrial” country. The focus of Saudi economic assistance is human development as dictated by Islamic brotherhood, As a matter of fact, Saudi development assistance helps local Aftican companies by hiring local people, as well as Western companies, that have the necessary technology to get the job done. Because of the relationship between Africa and Saudi Arabia, assistance is, given and received with dignity and respect. However, development assistance from Saudi Arabia is not enough to cure all of Africa’s economic crises. But Saudi Arabian development assistance has to insure that poor people benefit from such assistance and improve their quality of life through education, good health, and a better environment. There are other national objectives in Saudi Arabia's involvement in Affica. Saudi Arabia is very sensitive to developments in the Red Sea region. Its military involvement reached a peak in the mid-1970s when Riyadh led a pro-Western Arab- Red Sea axis to destabilize the Soviet-backed regime in Ethiopia. Riyadh provided arms and assistance to Eritrean insurgents and Somalia in the Hom of Africa However, civil wars in most of the sub-Saharan African countries have minimized the effect of Saudi Arabian political and economic assistance. In the 1970s, Saudi 218Arabian assistance to Somalia reached more than US$600 million when President Siad Barre was in power. It went to support Somalia in the Ogaden war. Yet Somalia did not recover from its civil war. Saudi Arabia also made important political and economic investments in Sudan, which supported Iraq during the Gulf crisis (1990- 1992). This happened despite Saudi generosity over the years; but Saudi Arabi continued development assistance to Sudan after the Gulf crisis. This work concludes that Saudi Arabia's economic and political assistance through the Saudi Fund for Development, the Arab Bank for Economic Development in Africa, and the OPEC Fund seems to have a positive impact, including cultural assistance. The Affican economic situation, including political instability and corruption of governments, coupled with aggressive Israeli interests in the region, present some concern for Saudi Arabia's political and economic assistance In Chapter V, Saudi Islamic assistance through the Islamic Development Bank was discussed. The bank's goals are to solicit funds, employ them in accordance with Islamic solidarity, and ensure distribution and employment of the funds in accordance with Istamic principles. Money is what you think it is. It is what you spend when you ‘want to buy something. Money in Islam is viewed as a medium of exchange and not as a.commodity. It eliminates the role of injustice, unfairness, and exploitation under abarter economy. In Islam, taking in usury, similar to modem day interest, which is a fixed return on investment, is treated as an offense against morals. However, despite the Islamic banking success in the Muslim world, as in Iran, Pakistan, Sudan, and Saudi Arabia in particular, the conventional system of banking and finance is still being practiced in Saudi Arabia. The IDB has had a positive economic impact on the 219Muslim world and in sub-Saharan African countries in eliminating poverty. The IDB and Islamic banking are based on the Holy Qur‘an and teachings of Prophet Muhammad {Peace Be Upon Him} which Muslims must follow. Therefore, Islamic banking is more acceptable to Muslims. This study suggests that there are schools of thought that consider that Islamic banking must be given priority over the conventional system, which depends on Western economic trends. It is worth mentioning that interest rates in most countries and even in Muslim countries are tied to US rates. By adopting Islamic banking, Muslim countries can avoid the turbulence of the US economic market and free their economies. Islamic banks without interest are conceivable with Islamic tools, such as Mudarabah and leasing (Jjara). Islamic banking concludes that the excessive use of interest (riba) in the modern world has caused economic oppression, which makes poor people suffer most. While studying economic oppression, it should be kept in mind that success against economic disadvantage can be ensured only in a country where economic contradiction (interest) is legally prohi ited and any economically oppressive transaction (interest) is punishable by law. Moreover, where this law is not strictly enforced the possibility exists that some Capitalists will jeopardize the larger interest of the people for their own private benefit. In addition to this essential condition, there are other prerequisites for stable, interest-free banking, for instance, proper social security arrangements to take care of needy consumers and the prevention of hoarding through imposition of taxes, An Islamic economy in the 21" century is going to be a new and modern ‘experiment directed toward achieving the goals of Islam and translating its values and 220principles into contemporary practice. Islamic economy is an integral part of an Islamic society and state and cannot be studied or managed in isolation. It is the entire social system, not just the economy, which is the concer of the Muslim policymaker. Instead of an isolationist approach, a holistic approach has to be adopted under an Islamic framework. Muslim economists say that even absent economic oppression, an interest-free banking system can be set up to discharge all the usual fun ns performed by the modern banking system based on interest. These experts agree that the reorganization of banking along the Islamic pattern can be brought about on the Islamic principles of profit sharing and partnership. ‘The modem economy today is based on economic contradictions to such an extent that it is difficult to visualize any set of economic relations. How to resolve these contradictions is the challenge that confronts all Muslim intellectuals, bankers, industrialists, businessmen, policymakers, and ordinary consumers. Saudi Arabia emphasizes Islamic banking tools (interest free) delivered by economic assistance and tries to export it to Africa's poor communities. Various Islamic tools have been practiced in Africa, especially by the SFD and the IDB, such as loan financing and leasing (lara). In conclusion, Islam is the most significant motivating factor in Saudi Arabi foreign policy. The principle of Saudi Islamic assistance to sub-Saharan African countries seems to have more significant influence even than development or economic assistance. Even though the Saudi foreign aid given to SSACs, as reviewed in the literature, is meant for Saudi national security—against Communism, to 221persuade African countries to come to the side of Muslim nations, or to eliminate their diplomatic relations with Israel—Saudi assistance has had other dimensions, such as to set up an oil embargo, or support King Faisal’s pan-Islamist movement against Nasser’s pan-Arab movement. Islam is the motivating factor and has been the ultimate objective of Saudi development and cultural assistance. It is strongly suggested that Islam is the vehicle that motivates Saudi foreign policy toward sub-Saharan Aftican countries. Furthermore, it is held that, if assistance in its broad sense is meant for the sake of Allah, it will be more effective and will last longer. Islam drives the components of Saudi Arabia’s foreign policy, and development assistance in general. Saudi citizen contributions to Africa provide a golden opportunity for Saudis to share the call to retum to the basic teachings of peace, harmony, and love and to serve as a force of moderation among nations. The Holy Qur'an distribution program seems to be a ‘major contributing factor in strengthening the Islamic ties between Saudi Arabia and African countries, There are two dimensions of Saudi Arabia's development and cultural assistance: people-to-people and government-to-government. The first side, people-to-people, comes from Saudi citizens to the African people, and is more humanitarian regardless of the political system; whereas Saudi assistance coming from the government to the government has its roots in national interests, This study began by postulating several hypotheses stating that Saudi Arabian development and cultural assistance to sub-Saharan African countries has a unique impact and outcome than other forms of assistance. Saudi Arabia plays a significant role in assisting the African poor through various development programs. The 222assumption is that a common culture and religious background facilitates acceptance of assistance from a middle-developed country to a less-developed country. The assumption brings a new dimension to humanitarian development assistance in a traditional environment where countries are used to Western humanitarian and development assistance. The findings validate both the hypotheses and the assumptions of the dissertation. 223‘Appendix A List of Saudi Arabian Missions im Some African Countries Republic of Cameroon Bastos, Yaounde PO Box 1602 Telephone: 212675 — 213261 FAX: 206689 Telex: 8336 Republic of Chad Inport Q Jander Miry St. PO Box 974, Chad Telephone: Embassy: 523695 Consult: 523696 FAX: 00235 - $23328 Telex: $308 KD HE. Office Telephone/FAX: 523689 Code: 00235 The State of Eritrea Asmara Workers Street 70/22/24 PO Box 5599, Eritrea Asmara Telephone: 121071 - 120851 ~ 120979 Director: 120934 FAX: 121027 - 120893 Peoples Democratic Republic of Ethiopia Royal Embassy of Saudi Arabia, Addis Abbaba Old Airport Higher 24 Kebele 13 House No. 002 PO Box 1104, Addis Abbaba Telephone: 710303 - 710043 - 710132 - 712277 - 712500 Telex. 21194 (0980) 224 Ambassador's Residence: Bastos, Yaounde, Cameroon Telephone: 200925 Ambassador's Residence: Gabrai — Gabremariam Street 14 Telephone: 120895 -120852 - 121028Head of Mission Telephone: 710069 - 712952 International Islamic Relief Organization Old Airport Higher 24 Kebele 13 House No. 991 PO Box 50659 Telephone: Director’s Office: 712862 - 204517 Residence: 200274 Saudi Arabian Airlines Tesfaye Kejela Building Higher 3 Kelebe 53 House No. 904/15 AA PO Box 1148, Addis Ababa Telephone: Office: 512769 Residence: 613797 Central: 513151 Head of the Mission Telephone: Residence: 710071 - 712950 FAX: 711799 - 719040 Office of the Consul Telephone: 710070 ‘World Moslem League Office Old Airport Higher 24 Kebele 13 House No. 170 PO Box 101181, Addis Ababa Telephone: Office: 712727 Residence: 711321 Republic of Gabon Intercontinental Hotel, Librviel Room 4027 Telephone: 735720, 735719, 735716 FAX: 735715, Code: 00241 Republic of Ghana No. 10, Noi Fetreke Street Ambassador’ s Residence: Roman Ridge Airport No, 4 Akosombo Street Residential Area Airport Residential PO Box 670, Accra Telephone: 776820 - 775562 Telephone: 776651 - 774311 225FAX: 773424 - 774829 Telex: 942407 NAJDIA CH Saudi Arabian Airlines office 12 St. Bumbido Telephone: Reservation Office: 235200 Airport: 200904 - 238612 Islamic World Connection Office P.O Box 3860 Telephone: 228884 - 215090 Residence: 352234 Republic of Guinea Canayenne Quarter, Conakry 11 Commune de Dixxin PO Box 611, Conakry Telephone: 462478 Satellite Station: 008711744415 Telex: 22446 99521 NAJDIA CKY Head of Consular Section Residence Osu No. F 868/1 Telephone: 776652 Accra Code: 0023321 Hours Difference: -3 Weekend: Saturday and Sunday Hours: 8:00 a.m. to 3:00 p.m. Republic of Kenya Main Muthaigh Road, Nairobi PO Box 58297, Nairobi Telephone: 76278 1/2/3/4 FAX: 760939 Telex: 22990 Saudia Consulate Section Telephone: 76278 1/2/3/4 International Islamic Relief Organization Hurlingham Jabavu Road, ‘Near Kilimani Police Station PO Box 18089, Nairobi 226 Ambassador's Residence: Cite Des Nations, Villa No. 34, Conakry Ambassador's Residence: Othelo Lane, Off Muthaiga Road Telephone: 762781 Airline Manager Telephone: Office: 223519 Residence: 568524Telephone: 714744 - 715305 FAX: 714743 Saudi Red Crescent Society Kiambu Road PO Box 919 Kiambu Telephone: 512691 FAX: 512690 Muslim World League Diamond Trust Building, 4" Floor P 0 Box 52871, Nairobi Telephone: 213367 - 332989 FAX: 230351 Republic of Mali Sogoninko - Route De Laeroport, Bamako PO Box 81, Bamako Telephone: 222528 — 223910 FAX: 225064 Telex: 2408 HE. Office Telephone: 229837 Morocco Station Manager Telephone: Office: 339371/339264 Car: 01220380 Residence: 391718 FAX: 339191 Repubilc of Niger Route De Tillabery, Niamey PO Box 339, Niamey Rep. D. E. Niger Telephone: 753315 FAX: 753134 - 752442 Telex: 09755279/ 09755299 NAIDIAH, HE. Office Telephone: 7537749 - 752442 227 Ambassador's Residence: Badala — Est Bamako Telephone: 224745 Ambassador's Residence: Boulevard, Mali, Bero Telephone: 723749Federal Republic of Nigeria 182 Awodow Road, Ikoyi Ambassador’ Residence: PO Box 2836, Lagos (12) il Abere Avenue, Ikoyi Telephone: 2690358 - 2690306 ~ 2690357 Telephone: 26903 10 FAX: 2690101 - 008731744325 Telex: 23193 Religious Attaché’s Office Plot 291 B, Road 101, Off Agose Al Egun Street Victoria Island Annex, Lagos Telephone: 611672 Islamic World Connection Ligue Mondiale Islamique Centre Al Faysal Center Lamorde Rive Droite, Niamey PO Box 11936, Niamey Telephone: 733342 FAX: 753104 Republic of Senegal 33 Rue Kleber, Dakar Ambassador’s Residence: PO Box 3109 Villa Fabienne Diouf Telephone: 232367 — 237153 Route Des Almadies FAX: 239613 Telephone: 202818 - 202819 Telex: $1219 Najdia SG Telephone: Office: 235494 Car: 381555 2nd Man: 261811 Republic of South Africa Holiday Inn Hotel, Crown Plaza, Pretoria CNR, Church, St. Beatrix, Arcudia Telephone: 341-1571 FAX: 341-4641 Sudan Al Amarat - New Extension St.No.29BI-10 Ambassador’s Residence PO Box 825, Khartoum Khartoum North Kafori Area Telephone: 472583 - 472584 Sagiat Ahmed Telex: 24014 ~ 24221 Telephone: 613877 - 74082 228Saudi Military Attaché King Abdul Aziz Road Crossing 15, Building 1 P.O Box 8097 Telephone: Home: 251407 Saudi Cultural Attaché Office: 452279 - 452919 Residence: Riyadh BI. 11, House No. 69 Telephone: Office: 451181 Home: 223006 Saudi Religious Attaché Residence: Amarat St, No. 59 Telephone: Home: 451127 Office: 451127 - 451077 Time Difference: -1 Saudi Arabian Airlines Ali Abdularif Street P 0 Box 2041 Telephone: 716733 - 80416 - 80413 - 80425 Republic of Tanzania Oster Bay, Kim Weri Road PO Box 238, Dar Alsalam Telephone: 678833 - 677470 - 67743 FAX: 68362 Code 002555 Republic of Zambia 4896 Los Angeles Boulevard, Lusaka PO Box 34411, Lusaka, ZA 10101 Telephone: 253266 — 253325 FAX: 253449 Telex: 45550ZA, Key: Khartoum: 0024911 Weekend: Thursday-Friday Hours: 8:30 a.m. to 3:00 p.m. Ambassador's Residence: 21 F Road Kabulonga Telephone: 261287 FAX: 264197 HLE. 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