Saudi Arabia Waives 6 Billion Dollars of Debt Owed by Least Developed Countries

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JEDDAH (Nov 11, 2018): Earlier Saudi Arabia’s state-run Saudi Press Agency (SPA) reported that the Kingdom has made a landmark move within its aid efforts, waiving a staggering US$6 billion of debt owed by least developed countries (LDCs). No further details on which countries will benefit from this generous gesture has been announced as of yet. The SPA report also highlighted the fact that Saudi Arabia is among the “most heavily subsidizing” nations in the world, contributing about 1.9 percent of its national income, considerably more than the UN target of 0.7 percent.

According to Al Arabiya English, the decision came at the Kingdom’s Debt Relief Initiative meeting endorsed by a cabinet of ministers. Chairman of the second committee of Saudi Arabia’s permanent mission to the United Nations, Mohammed Bin Abdulrahman Al-Qadi, is reported to have stated at the meeting that the move comes as part of the Kingdom’s broader efforts to support the UN’s 2030 Sustainable Development Plan. “Indeed, the cabinet’s decision has been highlighted as a continuation of Saudi Arabia’s humanitarian, political, and economic role in the sense of responsibility and its Islamic and international standing, the report said.

Al-Qadi also pointed out that Saudi Arabia “is concerned about the decline in core contributions to these funds, resulting in a deficit that spread negative effects on the achievement of sustainable development goals (SDGs).” He then explained that over the last 30 years or so, the Kingdom’s contribution to aid and humanitarian efforts have exceeded $100 billion.

Just over a week before this announcement was made, Pakistan announced that Saudi Arabia had agreed to a US$6 billion support program to Islamabad, in order to bolster the country’s diminishing finances. The program will be distributed in two phases: the Kingdom will deposit US$3 billion directly with Pakistan as balance of payment support, while another one-year deferred payment facility of up to US$3 billion for oil imports over 3 year period was agreed, according to a memorandum of understanding signed by both nations.

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