Page 18 - UAE Foreign Aid Report 2022

United Arab Emirates
18
Foreign Aid Report 2022

D. Funding Types

This report primarily discusses two types of foreign four upper-middle-income countries. Besides being
assistance funding: grants and loans. Grants constitute regarded as crucial for external economic flows, these
both cash and in-kind assistance that do not obligate the bilateral concessional loans have a unique role in
recipient to incur any legal debt. In contrast, loans entail catalyzing private investment in developing countries.
transfers for which the recipient is legally indebted,
such as investment-related loans offered to developing
countries or a loan formulated in conjunction with the
recipient as part of a joint venture.

In 2022, the distribution of the UAE’s foreign assistance
demonstrated a balanced approach, with nearly equal
disbursements of grants and concessional loans. The
grants, totalling AED 6.53 billion (USD 1.78 billion),
chiefly targeted the world’s Least Developed Countries
(LDCs), with 34% of these funds directed toward
these vulnerable nations. Furthermore, the decision
to channel 22% of the grant funding to Lower-Middle
Income Countries (LMICs) reflects the comprehensive
and multifaceted nature of the UAE’s foreign assistance
policy.

The persistence of extreme poverty, predominantly in
the world’s poorest countries, highlights the urgent
need for focused and sustained support to the LDCs.
The objective of eliminating extreme poverty by 2030
requires this concentrated effort. However, it is equally
important to acknowledge and address the enduring
poverty within LMICs. Despite their higher average
incomes, significant sections of their populations
remain impoverished. Striking a balance in providing
support to both low-income nations and impoverished
segments within LMICs is crucial. This approach is in
sync with the overarching principle of the Sustainable
Development Goals (SDGs): ‘leaving no one behind’.

Concessional loans, which are loans provided on
terms significantly more generous than market loans,
amounted to AED 6.14 billion (USD 1.67 billion) in
2022. These funds were directed to assist a number
Well projects in Niger.
of developing nations, including nine LDCs. However,
Source: Dubai Charity Association
the lion’s share of these loans (79%) was accessed by