JEDDAH: The Islamic Development Bank (IDB) and Asian Development Bank (ADB) have discussed ways to lessen the impact on their common member countries of the continuing global economic crisis and rising food prices.
During their meeting at IDB headquarters here yesterday, IDB President Ahmed Mohammed Ali and ADB President Haruhiko Kuroda reaffirmed their commitment to enhance development efforts in member countries, in line with the Paris Declaration and the Accra High-Level Forum on Aid Effectiveness.
They also called for stronger institutional and operational cooperation in line with the framework cofinancing agreement signed between IDB and ADB in September 2008. The agreement calls on both institutions to provide up to $2 billion equivalent each over the next three years to finance projects in their common member countries.
The cofinancing will mainly target transactions in the infrastructure, utilities, and urban sectors. However, it may also cover education, health and other sectors in selected countries.
The two banks have 13 common member countries in Asia (Afghanistan, Azerbaijan, Bangladesh, Brunei, Indonesia, Kazakhstan, Kyrgyz Republic, Malaysia, Maldives, Pakistan, Tajikistan, Turkmenistan and Uzbekistan).
“Because of the current global financial situation there is a need for strengthening of cooperation between the two institutions. Such cooperation is more important and necessary to work together to further boost the relationship which goes back to before the establishment of IDB,” Ali said.
Kuroda said “This is my first visit to Jeddah which provided an opportunity to review bilateral cooperation between the two institutions in such tough times.”
He added that “despite recent global crisis the Asian economies are not affected much. But if the crisis persists for two to three years from now then definitely there will be an impact on Asian economies.”
Kuroda praised IDB’s leadership role in Islamic finance and its various programs and initiatives, particularly in Asia. The two presidents agreed to further diversify and enhance cooperation in cofinancing, Islamic finance, renewable energy, risk management and knowledge-sharing.
Kuroda’s visit is designed to give new impetus to ongoing bilateral cooperation, and to forge a new strategic partnership between IDB and ADB.
Recent joint activities by the two institutions include the establishment of a $250 million Islamic Asia Infrastructure Fund.
The fund targets equity investment to promote private sector participation in infrastructure projects in common member countries.
Other activities include the development of a private hydropower plant in Pakistan, the rehabilitation and upgrading of an irrigation and water resources project in Afghanistan and, most recently, the financing of a renewable solar-based energy project in Bangladesh.