Dr. Bandar Hajjar, President of the Islamic Development Bank (IsDB), underlined Saudi Arabia’s unlimited support for the bank’s structural transformation that made it an integrated group, which comes in line with the Kingdom’s endeavor to promote joint Islamic action and achieve development.
In an interview with Asharq Al-Awsat, Hajjar said that the Saudi government has provided all the necessary facilities to the bank in the form of initiatives, mainly the successive increases in the bank’s capital and support for the bank’s structural formation, with the aim to achieve economic and social development within member-states and Muslim societies in non-member states.
The Kingdom has provided everything needed for the Islamic Development Bank Group to be one of the most important tributaries that support the nation’s growth and development, he stated, adding that Saudi Arabia was one of the largest contributors to the bank’s capital and to the institutions affiliated with the IsDB.
“Saudi Arabia is establishing its own development projects and has created a major boom in various fields. In this context, partnerships were built between the public and private sectors and private sector projects were launched, so we succeeded in building a model partnership,” Hajjar told Asharq Al-Awsat.
He noted that the IsDB financed many programs and projects of the Saudi private sector, while benefitting from the potentials and experiences of the sector to support investment, trade and economic exchange with member countries.
He added that the total funds authorized by the Bank Group to the Kingdom amounted to about USD 5.4 billion, including USD 1.3 billion from the Islamic Development Bank, USD 469 million for private sector projects approved by the Islamic Corporation for the Development of the Private Sector, and USD 716 million from the commercial operations of the International Islamic Trade Finance Corporation, in addition to USD 2.9 billion from various funds and approvals of insurance programs (investments, exports, imports and banks) worth USD 19.3 billion.
Regarding project support, Hajjar said that the cumulative value of approvals that the Islamic Bank has issued since its establishment in favor of Saudi Arabia was estimated at 437 projects.
The president of the IsDB noted that the industry and mining sector received 61.9% of the bank’s cumulative financing, which was translated in large projects financed through partnerships between the public and private sectors, while the energy sector was the second beneficiary and received 10.8% of the total financing, followed by the agriculture sector (9.1%).
On a different note, Hajjar said that the Islamic Bank launched a USD 2.3 billion aid package to member-states and Muslim communities in non-member states, to help them fight the Covid-19 pandemic and overcome its repercussions in the short, medium and long terms.
He added that the IsDB has called on scientists, innovators, research centers, universities and entrepreneurs to present innovative projects to address the Covid-19 virus and reduce its economic and social repercussions using the fourth industrial revolution technology. such as the “Blockchain”, artificial intelligence, big data and 3D printing robots, to monitor virus spread and containment, improve disease control systems and improve care for patients.
Hajjar stressed that the pandemic has revealed the fragility of health systems and the sensitivity of the economic sectors, especially the micro, small and medium enterprises (MSMEs), which contribute more than 40% of the GDP in developing countries.
Therefore, he said that the commitment of the Islamic Bank to respond to the pandemic increased until the end of December to reach about USD 3.55 billion, while the commitment of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) reached USD 495.9 million.
Hajjar revealed that about 52.3 million persons will benefit from the approved operations within the framework of the Strategic Preparedness and Response Program, including 43.3 million people who are included in the awareness campaigns on ways of transmission and the prevention of the pandemic, while 8.9 million families will be supported with food rations to meet their food needs. The program will also support 23,600 health care workers with capacity building and 20,000 small enterprises and families with microfinance services.
In this regard, the head of the Islamic Bank Group said that the financing agreements that the bank concluded with member countries to confront the Coronavirus pandemic will be fulfilled, adding: “There are no fundamental problems… Those countries are keen to meet their obligations to the bank…”
He explained that this stability has enabled the bank to obtain an AAA credit ratings from three credit rating institutions, namely Standard & Poor’s, Moody’s, and Fitch.
Hajjar noted that the size of the financing gap for the OIC member states to fill the shortfall in the infrastructure was estimated at USD 700 billion, adding: “No single institution can cover this gap. Therefore, the Bank’s five-year program presented an integrated vision for change, so that it could go beyond the traditional financing frameworks and explore other means that would enable member-states to obtain huge investments that abound in the global investment market and direct them towards developing their infrastructure.”