JEDDAH: The Islamic Development Bank (IDB) will issue Islamic bonds (sukuk) in order to collect funds from international market place in support of member countries affected by the global financial crisis, the bank's President Ahmed Mohammed Ali said.
"IDB has set up a committee to study the various aspects and effects of the global financial crisis and identify resources to finance investment projects in Muslim countries," the Saudi Press Agency quoted the IDB chief as saying.
He said seeking new financial resources was essential, anticipating substantial decline in foreign investment as a result of the global recession. IDB has increased its capital from 8.2 billion to 15 billion Islamic dinars ($25 billion) to meet development requirements of member countries.
Mohammed Ali said IDB's deposits and assets had not been affected by the financial crisis. "Our funds are invested in secure Islamic portfolios, which are not affected by speculative business," he added.
He said a team of experts led by former Malaysian Prime Minister Mahathir Mohamed has been formed to set out a new vision for the bank. The first task of this team will be to oversee the bank's administrative reform and devise plans to improve its efficiency.
He said the IDB would be developed from a mere financing organization to an institution that would spur growth in member countries and strengthen cooperation among them by introducing new economic programs.
"The bank's development plan will include introduction of new tools and mechanisms to amass financial resources," the president said. "We established contacts with a number of financial organizations and funds to finance small and medium enterprises, (SMEs) that will create more jobs for young men and women," he said.
Asked about the bank's program to support poor Muslim countries hit by rising prices of essential commodities, Mohammed Ali said the last meeting of IDB governors in Jeddah had allocated $1.5 billion for the purpose. "Our bank will also support member countries to increase their agricultural production," he said. "We are ready to support any project aimed at development of member countries," the IDB president added.
Speaking about IDB's financial condition, he said the bank has received the highest rating from major international rating agencies. "IDB has achieved tremendous experience in financing development and trade projects of member countries. We have so far given finances worth $51 billion to carry out various projects."
The IDB, the financial wing of the 57-member Organization of the Islamic Conference (OIC), has been invited to the preparatory meeting for the Arab economic summit in Kuwait next month.
