Organization: Arab Fund for
Economic and Social Development

Event: SAIMUN 2002

Student: Faisal Al Obeid

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Not their song, but appropriate.

The Arab World




The Arab Fund for Economic and Social Development (AFESD) is an autonomous regional Pan-Arab development finance organization. Its membership consists of all states that are members of the League of Arab States.

The AFESD assists the economic and social development of Arab countries through financing development projects, with preference given to overall Arab development and to joint Arab projects. Secondly, encouraging the investment of private and public funds in Arab projects. Finally, providing technical assistance services for Arab economic and social development.

According to the Agreement Establishing the Fund (as amended by Resolution 2/1997 of the Board of Governors), the purpose of the Fund is to contribute to the financing of economic and social development in the Arab states and countries through:

1-Helping countries by making loans on concessionaire terms to governments and to public enterprises and corporations, giving preference to projects which are vital to the Arab world, as well as joint Arab projects.

2- Financing private sector projects in member states by providing all forms of loans and guarantees to corporations and enterprises possessing juridical personality, and participating in their equity capital. As well as providing other forms of financing and furnishing the requisite financial, technical and advisory services in accordance with such regulations and subject to such conditions as may be prescribed by the Board of Directors of the Fund provided for in Article (22) of the Agreement Establishing the Fund.

3- Forming or participating in the equity capital of corporations possessing juridical personality for the implementation and financing of private sector projects in member states, including the provision and financing of technical, advisory and financial services.

4- Establishing and administering special funds whose purpose is compatible with that of the Arab Fund, and whose resources are provided by the Fund or other sources. The constituent instruments of such special funds shall define their purpose and functions, and set out the regulations governing their operations and administration.

5- Encouraging the investment directly of indirectly of public and private capital in a manner conducive to the development of the Arab economy.

6- Providing expertise and technical assistance in the various spheres of economic development. The AFESD seeks to assist member country in eliminating development constraints, increasing absorptive capacity and achieving higher rates of growth, and to foster economic integration and cooperation among member countries.

The AFESD also provides secretariat services for the Coordination Secretariat of Arab National and Regional Development Institutions, which meets periodically to discuss ongoing and planned development projects with the intention of streamlining operational procedures among the member institutions. Members of the coordination group are the Abu Dhabi Fund for Development, the Arab Bank for Economic Development in Africa, the AFESD itself, the Islamic Development Bank, the Kuwait Fund for Arab Economic Development, the OPEC Fund for International Development, and the Saudi Fund for Development. The Coordination Secretariat publishes, twice per year, a Summary of Loans and Technical Assistance Extended to Developing Countries by Arab National and Regional Development Institutions.



The AFESD is an Arab regional financial institution, having an independent juridical personality. On 16 May 1968, the Economic and Social Council of the League of Arab States adopted the Agreement Establishing the Fund. The General Secretariat of the League of Arab States declared the Agreement effective as of 18 December 1971. The first meeting of the Board of Governors was convened on 6 February 1972, and the Fund commenced operations in early 1974.

The Arab Organizations Headquarters Building is found outside Kuwait City in Shuwaikh. Completed in 1994, it is a home for four major Arab organizations: the Arab Fund for Social and Economic Development, OAPEC (Organization of Arab Petroleum Exporting Countries), the Inter-Arab Investment Guarantee Corporation and the Arab Maritime Petroleum Transport Company.

Members of the AFESD includes all twenty-one Arab countries that are members of the League of Arab states which are Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, Yemen.

The Board of Governors is the highest authority. The Board of Directors consists of eight Directors and eight Alternate Directors elected by the Board of Governors for a two-year period. The Board of Directors guides operations in general and exercises powers delegated to it by the Board of Governors.

The Chairman of the Board of Directors and Director General is elected by the Board of Governors for a five-year period and is responsible for the conduct of operations and appointment of staff.



Authorized capital is 800 million Kuwaiti dinars (80,000 shares), of which KD 663.04 million was fully paid by December 1989. The Fund may borrow twice the amount of its capital additional borrowing may be authorized by the Board of Governors. No borrowing has yet occurred.


4-Key Political Allies

The AFESD main political allies are the ones who truly benefit from these organizations. Also the other organizations that are located all around the world which get financial support from the AFESD. All Arab countries are allies with this organization. But after the events on September 11, 2001, many countries opposed Arab organizations thinking that they are funding terrorists. Its allies are mostly Arab countries because it is a formally Arab organization, but also other countries and organizations which AFESD a member of. AFESD became a member of the CGIAR in 1977.


5- Weaknesses and Strength.

It is an organization for Economic and Social development. It supports Arab countries that need help. The member states financially support this organization to do its projects and give loans to many needing countries. Also it invest it saving and surplus in different markets and countries. It is a useful organization, but it has some weaknesses and problems when talking about economy and politically.

It is a prisoner of Kuwait’s economy and political status because its headquarters is located in Kuwait. It would be effected if Kuwait has political troubles with other countries and it was effected from the Sept. 11, 2001 events. It deals with Kuwait Dinars (KD) so the economy of Kuwait completely effects the financial Status of it.

Also some countries may not give the organization money on time due to economic problems in its country. Nowadays, many countries suffer from economic problems so it is not effective as before.



6. Bibliography:

"Arab Fund for Economic and Social Development"

"Arab Fund for Economic and Social Development"


"CGIAR Members: Arab Fund for Economic and Social Development."