Malaysia has called for a US$10bn Islamic bond issue to fund infrastructure projects to spur economic growth in less developed Muslim countries.
“A sum of US$10bn will be a decent amount to look forward to. I am sure the infrastructure bond will receive a good response,” Malaysia’s second finance minister Nor Mohamed Yakcop has said.
Nor Mohamed says Malaysia would support the bond – debt that complies with the Koran’s ban on paying or receiving interest.
“We hope it will take off quickly,” he said after a two-day meeting of the Islamic Development Bank (IsDB), the lending arm of the world’s biggest Muslim grouping, the Organisation of Islamic Conference (OIC).
In an opening speech to the meeting, Malaysian prime minister, Abdullah Ahmad Badawi, who is chairman of the 57-member OIC, also urged the bloc to establish an infrastructure bond.
“For infrastructure financing alone, it is estimated that the IsDB members will require about US$741bn over the next 10 years,” he said.
Abdullah suggests that the central banks of OIC countries contribute to the bond fund and that the proceeds be used for major projects in member nations.