President of the Islamic Development Bank (ISDB), Ahmad Mohamed Ali, has declared that the bank has not yet been affected by the global financial crisis. He made his comments during a reception hosted for ISDB governors and heads of international and regional financial institutions held alongside the World Bank and IMF meetings in the Washington DC.
“Despite the financial crisis engulfing the markets and the current market conditions, I am pleased to inform you that the IsDB group is financially strong and will be able to meet its commitment to member countries and conduct normal operations,” he commented.
He puts the resilience of the bank down to the fact that its investment operations are conducted in line with Islamic shari’a, and therefore not exposed to products linked to sub-prime mortgages. It also has large capital base of 15bn Islamic dinars (US$23bn). It also enjoys favourable credit ratings from Standard & Poor’s, Moody’s and Fitch.
However, the main challenge facing the bank is the impact of the crisis on its 56 member countries, and how the bank will have to react to these changes.
He also highlighted the bank’s efforts to combat poverty in its member countries, having launched its Islamic Solidarity Fund for Development (ISFD).
This fund tackles poverty from two angles, one focusing on microfinance and the other looking at vocational training in member states.
In March, the development also launched a five-year special programme for the development of Africa (SPDA). This initiative will commit US$4bn to the continent between the period 2008 and 2012.
Mohamed Ali highlighted examples of the success of this programme citing the Kandadji Dam in Niger and the Taossa Dam in Mali which provide water and electricity to the West African nations. A total of nine development institutions participated in the financing of these projects.
He added that ISDB remained committed to Africa, particularly as it represents the largest region block with 27 member countries.
The bank has also initiated ten projects in ten different member countries to be financed, with commitments totalling US$178mn. A further US$52mn is being provided to support trade operations for three countries to help support the supply of improved seeds, fertilizers and equipment to boost food production.
This financing follows the ISDB’s Jeddah Declaration made in June at its annual meeting which committed US$1.5bn over a five-year period to help member countries affected by rising food prices.
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