The OPEC Fund for International Development, or OFID, proves to be the developing world assisting, intergovernmental development financing organization. The member states of OPEC organized this group in 1976. They actually conceived of the idea while they were at a meeting in Algiers, Algeria in March of 1975. The Solemn Declaration of the Conference stated that it “reaffirmed the natural solidarity which unites OPEC countries with other developing countries in their struggle to overcome underdevelopment.” They sought ways to build up cooperation between the two groups of fellow developing nations.
The goal of the OPEC Fund for International Development seeks to establish stronger financial ties and coordinate projects between the various OPEC Member Nations and other non-OPEC developing states. They work to deliver financial assistance to these poorer fellow developing nations in order to aid their socioeconomic progress. This makes the primary mission of the group to encourage South on South Partnerships with those other developing nations throughout the globe in order to finally eradicate poverty.
They pursue this noble goal from their global headquarters in Vienna, Austria. Today’s Director-General is Saudi Arabia’s own Suleiman Jasir Al-Herbish. This is his third term heading the OPEC Fund for International Development. The man was unanimously re-elected in June of 2013 by the Ministerial Council, the highest authority within the institution.
Because of the decision at the First OPEC Summit held in Algiers, the capital of Algeria, back in 1975, the Member Nations had their various Finance Ministers from the Member Nations meet to create the OPEC Special Fund. This pool permitted the Member Nations to funnel aid to those developing countries most in need of financial and developmental assistance. In 1976, this OPEC Special Fund began life with a then-impressive $800 million reserve.
By the conclusion of 1977, the OPEC Fund for International Development had provided 71 loans to a substantial 58 nations. They had also funneled donations from the Member Nations to various other developmental intergovernmental organizations including the IMF International Monetary Fund and the IFA International Fund for Agricultural Development.
The fund performed so spectacularly that the Member Nations chose in 1980 to change the temporary capital facility into a permanent legal organization renamed the OPEC Fund for International Development. They achieved the status of international development agency by May of 1980.
The member nations of OFID are 13 separate countries. These include the following: Venezuela, United Arab Emirates, Saudi Arabia, Qatar, Nigeria, Libya, Kuwait, Iraq, Iran, Indonesia, Gabon, Ecuador, and Algeria. Ecuador had suspended its membership in the developmental organization in the early 1990s. They returned to full membership status in June of 2014, 22 years later.
The OPEC Fund for International Development has at least five different ways they have disbursed their largess to help fellow developing nations most desperately in need of financial – developmental assistance. They offer developmental loans for programs and projects, trade financing, and support for balance of payments needs. They also offer grants to support food aid, technical assistance, research, and humanitarian relief in disasters and emergencies.
A third operation has them finance activities of the private sector in developing nations. The group similarly makes generous contributions to developmental institutions and their resource bases when their work helps out developing nations. Finally, they represent the various OPEC Member Nations internationally when they find themselves in the global financial arena in need of a collective action.
The resources of the OFID come from a build up of the reserves of the operations of the organization itself as well as voluntary member state contributions. In June of 2011 in response to the many and growing developing world needs brought on by the global financial crisis, the OPEC Fund for International Development replenished their funds with an additional $1 billion U.S. dollars.
The term 'OPEC Fund for International Development (OFID)' is included in the Economics edition of the Financial Dictionary. You can get your copy on amazon in Kindle or Paperback version. See more details here.