As its donor ambitions expand, UAE designs aid strategy

The news that the United Arab Emirates was the largest donor in 2013 perhaps came as a surprise to those who expected traditional donors to make it to the top of the list — an observation that Erik Solheim, chair of the Development Assistance Committee of the Organization for Economic Cooperation and Development, has noted. Aside from being the world’s most generous donor, the UAE also saw the highest increase in foreign aid spending in 2013 — a 435 percent increase from its 2012 disbursements, based on the latest OECD data. The Persian Gulf state has actually been providing development assistance for quite some time. Khalid Almezaini, who traced the beginnings of and analyzed the factors behind UAE assistance in his book, “The UAE and Foreign Policy: Foreign Aid, Identities and Interests,” noted that the UAE started giving aid in 1971 — when it was still a developing country. But the UAE, one of the most strategically important states due to its abundance of oil reserves, has only become a more visible provider of foreign aid in recent years. Following a Cabinet decision, the Abu Dhabi government established in 2013 the Ministry of International Cooperation and Development to decide where UAE assistance should go as well as enhance the Gulf state’s status as a donor. The UAE’s entry into the DAC as the donor club’s first participant — a position that will enable it to contribute to DAC discussions on important development issues — further underscored its emerging donor status. The UAE established the Abu Dhabi Fund for Development in 1971 as a vehicle for providing concessionary loans and grants. While the fund remains one of the Gulf state’s main providers of concessional funding, the UAE today courses aid through more than 40 channels, which it refers to as donors. These include government bodies that guide foreign aid priorities, local entities that implement projects on the ground in often high-risk settings, and foundations that make these projects feasible to run. Foreign aid, according to Almezaini, has been a “fundamental tool in the UAE’s foreign policy” — a critical component that has allowed it to play a more important role in the region and engage with Arab and non-Arab countries alike. 5 Cs to guide foreign aid strategy As UAE’s donor ambitions widen even further, there is a need to consider just how its aid should be delivered. According to MICAD Minister Sheikha Lubna al-Qasimi, the role of the recently established body is to ensure that UAE money is spent where it can make the most impact and that recipient countries benefiting from UAE assistance will more or less be able to predict the amount of aid to come from the UAE. “The amount of aid we provide is important, but it is not as important as how we provide it,” she told Devex. The UAE, she said, is in the process of designing its first foreign aid strategy, which will be guided by five Cs: coordination, coherence, comparative advantage, clear planning and counting the result. This means that MICAD will have to provide consistent direction on how UAE donors set priorities, secure buy-in from other government departments, choose issues and partners of focus, take into account the perspectives of different stakeholders, manage monitoring and evaluation, and plan ahead. “I work closely with our Emirati stakeholders so that the foreign aid policy has buy-in and that our ministries are acting in concert,” Sheikha Lubna said. “This is important, as a crucial element of the foreign aid policy will occur at the intersection of ministries and through the private sector.” Through its aid program, the UAE also aims to draw on the strengths that “enabled [it] to evolve into the country that it is today,” the minister said. Renewable energy, for example, is a prominent part of UAE’s aid priorities. In Mauritania, one of the top 25 recipients of UAE aid in 2013, the state-owned Abu Dhabi Future Energy Co., or Masdar, put up the Sheikh Zayed solar power plant, which now supplies 10 percent of Mauritania’s total grid capacity. Moving beyond its orbit In deciding where to direct its aid, the UAE seems to have a soft spot for Asia, where the bulk of UAE assistance has been going since 2009, or the first year that it released official aid figures. There is a particular focus on the Middle East, specifically Jordan, Afghanistan and Yemen — three of the top recipients of UAE assistance in 2012 and 2013. Those that share a similar history and culture with the UAE — Pakistan and the Palestinian territories, for example — are also usually among the largest recipients of UAE aid, according to Almezaini. In 2013, Pakistan and the Palestinian territories were the third and sixth top recipients of UAE assistance. 2013 was the first time Africa became the largest recipient region of UAE aid. The funds disbursed to Egypt — an amount that reached nearly 17 billion UAE dirhams ($4.6 billion) and represented 98.6 percent of aid disbursed by the UAE that year — significantly altered the long-standing pattern of UAE assistance. “While the events in Egypt were somewhat unanticipated and struck the aid community by surprise, the UAE was happy to be in a position to provide assistance to a regional neighbor,” Sheikha Lubna said. But Asia is likely to continue to have an important place in UAE’s ever-expanding reach. “When we think about where we give our assistance, I think our approach compares well against any global best practice in development,” the minister said. “It prioritizes the places development assistance will be most effective by prioritizing locations where we as a donor have the most to offer.” Interestingly, Western donors themselves have received some form of UAE aid. Aid for these countries funded mostly seasonal religions and cultural programs — activities related to the observance of Ramadan, for example — and the operations of schools, such as Al Maktoum Foundation College of Higher Education in Scotland. Some of these concerns are pretty universal. The Mohamed Bin Zayed Species Conservation Fund, for example, runs programs in more than 120 countries. “These activities address a global issue and are not limited to developing countries only,” Sheikha Lubna said. A heavy focus on bilateral government support While the UAE has funded several types of activities in a diverse pool of countries, contributions to national governmental organizations and civil society institutions haven’t been as prominent as bilateral government support or direct project implementation. In 2013, these contributions accounted for less than 4 percent of UAE assistance. Aid given to multilateral institutions and international NGOs, meanwhile, make up an even smaller share — just 2 percent of UAE aid. Bilateral assistance to governments was the main type of UAE assistance in 2013. Click here to view a larger version. Sheikha Lubna, however, noted that “in delivering foreign assistance, we care first about outcomes.” “We will deliver that aid however it is best suited, sometimes this is going to be programming alongside other development partners, sometimes as budget support and other times through local NGOs,” she said. Still, NGOs are a dominant feature of UAE’s donor landscape. For example, the Zayed Bin Sultan al-Nahyan Charitable and Humanitarian Foundation, which implements projects through UAE embassies in partnership with local or international aid organizations, provides humanitarian relief to those living in areas struck by natural disasters. Dubai Cares, meanwhile, helps children in developing countries gain access to quality primary education, regardless of gender, ethnicity or religion. Noor Dubai Foundation aims to prevent and treat blindness and limited vision in Africa and Asia. Ewa’a Shelters for Women and Children provides safe and temporary shelter for women and children who are victims of human trafficking and sexual and gender-based violence in the UAE. The use of country strategies in UAE priority countries will also continue to guide how aid is provided. “We are increasingly working through country strategies to make sure we are using the best modality, because the best modalities depend heavily on the circumstances,” Sheikha Lubna said. “This process will most certainly consider the work of local NGOs and civil society institutions on the ground in a country.” How will the drop in global oil prices affect UAE development assistance and the country’s yet to be released foreign aid strategy? Let us know by leaving a comment below. Check out more insights and analysis for global development leaders like you, and sign up as an Executive Member to receive the information you need for your organization to thrive.