IDB to aid crisis-hit Islamic countries

Jeddah: The Jeddah-based Islamic Development Bank (IDB) has unveiled plans to help some Muslim countries overcome the impact of global financial turmoil.

IDB president Ahmad Mohammad Ali said that the 56-member bank will issue Islamic bonds in order to collect funds from international markets to support the member countries affected by the crisis, according to a statement issued by the bank's Jeddah media office.

Ali said that the 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 said.

"The 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," he said, adding that seeking new financial resources was essential.

It is expected that there will be a decline in foreign investment as a result of the global recession.

Referring to a plan to restructure the IDB, Ali said a team of experts led by Malaysia's former prime minister Mahathir Mohammad 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.

Ali said the IDB would be developed from a mere financing organisation to an institution that would spur growth in member countries and strengthen cooperation among them by introducing new economic programmes.

"The bank's development plan will include introduction of new tools and mechanisms to amass fin-ancial resources," the IDB president said. "We established contacts with a number of financial organisations 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 programme to support poor Muslim countries hit by rising prices of essential commodities, Ali said the last meeting of IDB governors in Jeddah had allocated $1.5 billion (Dh5.5 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.

The IDB has been invited to the preparatory meeting for the Arab economic summit, scheduled to be held in Kuwait next month.

Speaking about the IDB's financial condition, he said the bank has received the highest rating from major international rating agencies.

"The IDB has achieved tremendous experience in financing development and trade projects of member countries. We have so far given finances worth $51 billion."