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IDB board allocates $1.5b under Jeddah Declaration

JEDDAH — A significant outcome of the 33rd annual meeting of the Board of Governors (BOG) of the Islamic Development Bank (IDB) Group, which ended at Jeddah Hilton on Wednesday, was the allocation of $1.5 billion under the Jeddah Declaration to the 26 of the Group’s LDMCs — least developed member countries — to overcome the food crisis that is affecting countries all over the world, according to Dr. Ahmed Muhammad Ali, IDB president.

Addressing the media conference, which was also attended by Ahmed bin Mohammed Al Khalifah, chairman of the BOG, who is also finance minister of Bahrain, at the venue soon after the event ended, Ali said that the meeting was a success from all aspects.

The 26 LDMCs are Afghanistan, Bangladesh, Benin, Burkina Faso, Cameroon, Chad, Comoros Islands, Djibouti, Gambia, Guinea, Guinea-Bissau, Kyrgyzstan, Maldives, Mali, Mauritania, Mozambique, Niger, Palestinian Authority, Senegal, Sierra Leone, Somalia, Sudan, Tajikistan, Togo, Uganda, and Yemen.

Ali explained that these are affected by the food crisis more than the others, and that the $1.5 billion is just a “nucleus” amount, which will be doubled because the countries need a long-term solution to the problem.

The IDB initiative is significant as many Muslim countries, especially those in Africa, have been hit by an unprecedented food crisis as a result of growing commodity prices including rice and other foodstuff. Under the five-year initiative IDB would give soft loans to member countries to increase their agricultural production and make adequate stock of food grains.

Ali added that the programme will be implemented immediately in cooperation with member countries, chambers of commerce and businessmen.

Appreciating the Saudi initiative to invest in agriculture, animal husbandry and fisheries, and a call to Saudi businessmen to invest in these sectors, Ali urged other member countries to follow the Kingdom’s example.

He said that the request of Qatar to increase its subscription to the capital stock of the IDB by Islamic Dinar ID1 billion — from ID15b to ID 16b was welcomed.

When told that the cost of loans was high, Ali said that the Bank was aware of it and responding to the situation. “It was raised by some governors. We are trying to find a solution. The Bank has an AAA rating, which means it should be able to mobilise the resources of the market at a low cost,” he said.

On December 5, last year, Fitch Ratings upgraded IDB’s long-term issuer default rating (IDR) to “AAA” from “AA+.” Fitch changed the outlook for the long-term IDR to stable from positive. It also affirmed IDB’s short-term IDR at “F1+”.

The upgrade stemmed from further improvements made in the credit standing of the bank’s main shareholders, their ongoing subscription to the capital increase initiated in May 2006 and the progress observed in the establishment of its concessional fund, the Islamic Solidarity Development Fund (ISDF).

Ali assured that the Bank has a plan for reform to bring about a radical change. He went on to explain that the Bank has to compete with other financial institutions and should be able to do so. “It is planned to change the mode of financing to make it more competitive, otherwise the Bank cannot compete in the market,” he said.

Asked whether the unit for women at IDB would be expanded into a department, Ali said the Bank would continue its efforts for the empowerment of women by supporting their activities. Four of the IDB Prize winners this year were women — Prof. Asma Ismail of Universiti Sains Malaysia, Runa Khan of Friendship Charitable Society in Bangladesh, Saideh Ghods of Iran and Ghaliya Al-Haj Abdu of Sudan.

He said that the inauguration of the meeting by Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz on Monday night was a clear message of the King’s concern and interest in the Islamic world, the Bank’s activities and growth and development of the member countries. He stressed that King Abdullah continues to support programmes of the IDB.