ABSTRACT
In economic literature there prevails no consensus on the meaning of foreign economic aid. Saudi Arabia is a labour-deficient country. To execute its development plans it has to rely heavily on expatriate, especially skilled labour. This could be considered a rational motive for Saudi aid to labour-surplus Arab countries such as Egypt and North Yemen. The political and cultural-religious motives behind Saudi aid to Arab countries is attributable to the fact that Saudi Arabia plays a major role in the Arab world. Saudi Arabia contains the two holy sites such as Mecca and Al-Medina for the Islamic world. The Saudi Development Fund (SDF), also called the Saudi Fund for Development, was established on 26 August 1974. Other aid represents Saudi contributions to the international agencies as the International Monetary Fund (IMF) and the Organization of the Petroleum Exporting Countries (OPEC) Fund along with its specialized agency the International Fund for Agricultural Development.
