The burden of arrears owed by Iraq, Sudan and Somalia means the Arab Monetary Fund (AMF) is tightly constrained in its ability to provide new loans, the Abu Dhabi-based fund’s annual report says. Arrears totalled 152.5 million Arab Accounting Dinars (AAD – $668 million) at the end of 1993.

‘The fund’s financial resources remained under pressure arising from the size of overdue instalments of principal and interest owed by some borrowing countries,’ the AMF says. ‘This has considerably constrained the fund’s ability to expand its lending function and held up a substantial proportion of resources which could otherwise be re-lent to other eligible members,’ the report says.

Only one loan was approved and drawn down in 1993, providing AAD 3.25 million ($14.2 million) for Mauritania. An AAD 11.3 million ($49.5 million) loan was approved for Yemen at the end of the year and drawing on this began in 1994.

Iraq owed a total of AAD 63.7 million ($279 million) at the end of 1993, followed by Sudan (AAD 59.7 million – $261 million) and Somalia (AAD 29 million – $127 million). Total arrears were equivalent to 48 per cent of the AMF’s paid-up capital in convertible currencies.

Net income in 1993 fell to AAD 18.7 million ($81.9 million), from AAD 21.7 million ($95 million) in 1992. Investments were increased by AAD 17.2 million ($75.3 million). Loan draw-downs fell to AAD 1.9 million ($8.5 million) in 1993, from AAD 8.5 million ($37.2 million) the previous year.