The Best Job in the World
With a working endowment now at $4.4 billion, OFID’s Director Suleiman Al Herbish wants to end “energy poverty”
Suleiman J. Al-Herbish surely has one of the best jobs in the world. As Director General of OFID, the OPEC Fund for International Development, he is in charge of a multi-billion dollar revolving endowment whose mission is to help countries in the neediest parts of the world. Established in 1976 at the time of the oil crisis, OFID began with an initial endowment of $800 million that was doubled within a year. At the close of May 2011, resources totaled $5,853.0 million, consisting of reserves in the amount of US$3,390 million and direct contributions of US$2,463 million. With a repayment rate of nearly 97%, much of that money is steadily put back into circulation in new projects to 130 countries on 5 continents.
Then, on June 16, the OFID members voted an increased capitalisation of $1 billion to the fund – the first such increase in 31 years.
So is he happy?
"If you had asked me last week, I would have said no," Al-Herbish said shaking his head in disbelief. "But now…, I am happy! This will give us the strength so we can do much more."
We met in the Fund headquarters at Parkring 8, a magnificent Stadtpalais designed by leading Ringstrasse architect Theophil von Hansen and built between 1864 and1868 for Austrian Archduke Wilhelm Franz Karl. As grandmaster of the Order of Teutonic Knights, the Archduke sold the palais to the order in 1870, operating it as elegant clubrooms and apartments until 1938, when the Nazis took possession. It served as headquarters for the SS until 1945, and then for the Vienna Police. OFID purchased the building in 1981.
Al-Herbish’s office is on the bel étage, what the Viennese call the gracious, high-ceilinged floor of salons, dining rooms and reception areas of city villas, called the 1st floor, but only after you pass the Erdgeschoss (ground floor) the Hochparterre (upper ground floor) and the Mezzanine, situated high enough in a building to escape the noise, smells and prying eyes of the 19th century street. This elegant set of rooms, meticulously preserved, now constitute OFID’s Conference Rooms and Management offices. The organization is justifiably proud, and will tell you that all the necessary technical requirements of a contemporary office building were introduced in a way that ensured that the façade, its courtyard and the bel étage, have been preserved in their original magnificence.
At the moment Al-Herbish’s priority is addressing what he calls "energy poverty," situations where a lack of reliable power supplies makes meaningful development impossible. OFID estimates that there are at least 2.4 billion people worldwide who fall into this category, including 1.6 billion without electricity access.
"The eradication of ‘energy poverty’ has become part of our mandate," Al-Herbish says. "It’s not just a slogan; we are going for solutions, looking for ways to bring energy to the poor." Here as with nearly all their projects, OFID looks for other institutions and organizations with whom they can act as cooperative partners – in this case UNIDO, the IAEA, and the International Energy Forum among others, to raise awareness about energy poverty.
"In this sector we are promoters; this issue has been forgotten," he said. "Look at the [UN] Millennium Goals: none of them relate to energy, but none of them would be possible without it.
Overall, OFID has four mechanisms for distributing development aid. The first, and largest, program is Public Sector Loans given directly to the governments of cooperating countries to support development operations primarily in agriculture and infrastructure projects, schools and hospitals. These are generally ‘soft loans" at well-below market rates and long pay-back horizons.
A second mechanism is the Private Sector Facility established in 1998, which according to OFID executives was created "in response to growing demand among partner countries for investment in private enterprise," that they see as "the engine of economic growth." Tools in this program include loans at preferable but closer to market rates, lines of credit, equity, quasi-equity and leasing either directly to businesses or channeled through local financial institutions.
A third principle mechanism is a Trade Financing Facility supporting activities affecting the balance of trade in partner countries, including governments, enterprises all or partly state owned, banks and private enterprises.
The fourth mechanism is Direct Grants, which while only about 4% of total funding, totaled more than $25 million in 2010.
A large part of OFID activity is focused on Africa – by necessity, Al-Herbish says – here again trying to be a catalyst for cooperative efforts.
"The problems of sub-Saharan Africa are tremendous," he said, " and unless you have a global solution, nothing much will be accomplished. The G20 should be working on this as well as all UN agencies. Still, we should not wait; we must not let our work be conditional on the participation of others.
"The real problem is not economics, it is ethics."
Ethics yes, but politics no. In fact, Al-Herbish works very hard to keep OFID politically neutral, helping where it is needed – now in 130 countries -- regardless of system or regime. "We go to countries that even the World Bank doesn’t go to."
The only place they don’t go to is to their own member countries – Algeria, Gabon, Indonesia, Iran IR, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela – except in the case of a natural disaster.
So, do revolutions count as natural disasters? Is OFID helping stabilize the countries in the midst of the upheavals that have come to be called the "Arab Spring"? Again Al-Herbish emphasizes the "non-political" role of the organization.
"But of course when you open schools, that helps stability," he agreed. They have what he described as "good infrastructure and social programs" in Tunisia and Egypt. "We target the people, not the governments."
Their work also reaches Europe, with major roads and infrastructure programs in Albania, and social integration programs in their host country of Austria.
"Poverty alleviation is not just about economic policies, but about real people and their daily struggle for survival," Al-Herbish says on the organization’s website. "At its most basic, it is about deprivation, hunger, disease and destitution - stark realities that almost half the world’s population faces day after day, month after month." While this appears obvious, yet in both its range and its commitment to ongoing support – rather than pilot projects so loved by other foundations and endowments – it is something close to unique. But Suleiman Al-Herbish makes no such claims.
"I don’t think there is anything so unusual about what we are doing," he told me. "We are helping here and there, where we can. This is our mandate. This is why we are here."