THE HISTORY OF THE OPEC FUND
Era (1976-1983)
Experts reviewed a wide variety of proposals and options before eventually settling on a proposal calling for the establishment of an “OPEC Special Fund” as a special account administered by a joint committee. This “special account” would consist of a series of accounts held and administered by national agencies. The idea was to pool national resources, avoid duplication and strengthen identification with the common cause – to support fellow developing countries. The spirit of South-South solidarity was also expressed in a groundbreaking provision that became the OPEC Fund’s defining feature in the world of development institutions: The resources would be used only to benefit developing countries other than the contributing members. Article 3.01 of the Agreement Establishing the OPEC Fund says: “Eligible beneficiaries of the financing provided by the [OPEC] Fund shall be: a) the Governments of developing countries other than OPEC Member Countries; and b) international development agencies the beneficiaries of which are developing countries.” Agreement was also reached on the kind of financial support the OPEC Fund would provide: loans for projects, programs and balance of payments support. A unique feature of the OPEC Fund’s public sector loans is that in addition to being concessional, they are not conditional: “In carrying out our mandate, we strive to take sustainable, pro-poor approaches, while respecting our partner countries’ development priorities,” then Director-General Suleiman J. Al-Herbish said in September 2013. Thirdly, the OPEC Fund follows the principle of strict political neutrality. Director-General Shihata emphasized: “If you are a specialized agency, which we are, and our mandate is economic development, then we should leave the political issues to other organizations
G77 statement on development financing
The G77 is pursuing the following: • Securing a commitment to the UN 0.7% official development assistance (ODA) target, as well as a political commitment to reversing recent cuts in ODA. • A commitment to triple multilateral development banks’ (MDB) lending as well as to capital increases. • Improving MDB lending terms, including enhanced concessionality, longer tenor loans and scaling up lending in local currency. • Reaffirming the principle of additionality of climate finance. New York, May 1, 2025
whose mandate is political reform and political rights." Following intense preparations, the Finance Ministers of the OPEC member countries met in Paris in January 1976 “amid tight security precautions,” as the New York Times reported. Terrorists had stormed the previous OPEC ministerial meeting in Vienna on December 21, 1975, and three people had been killed. Undeterred, the Paris meeting went ahead “to work out details of a US$1 billion aid fund for poor countries,” the paper wrote. “Final approval was expected tomorrow.” And so it happened: On January 28, 1976 the Agreement Establishing the OPEC Special Fund was signed in Paris
by the 13 member states of OPEC at that time. The account was directly and collectively owned by the parties to the agreement. The fund was to be administered by a governing committee, later to become the Governing Board, representing all members and with voting power distributed according to a two-tier formula. Each member would have one vote. These votes would then be related to member countries’ contributions. The reference to “ministers concerned” in the founding documents was later interpreted in a way that allowed for the introduction of a second supervisory pillar of governance, the OPEC Fund Ministerial Council.
“The OPEC Fund’s founding mandate – that the resources contributed by OPEC
member countries should be directed exclusively to support the development goals of non-member developing nations – remains at the core of our institution today.”
Abdulhamid Alkhalifa, President, OPEC Fund
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