IDB committed to giving more emphasis to private sector

IDB committed to giving more emphasis to private sector

JAKARTA (JP): The two-day annual meeting of the Islamic Development Bank (IDB) ended here yesterday, with a stronger commitment to supporting the private sector and less developed member countries.

The meeting also approved the applications of Mozambique and Kazakhstan to become the 49th and 50th members of the Jeddah- based bank.

Minister of Finance Mar'ie Muhammad said the meeting was very successful in laying a stronger foundation for the future of the bank, which was established in 1975 to help the economies of Moslem countries.

In addition to the approval of some "routine" matters, such as financial reports and working programs, senior officials of the bank's member countries also agreed to further promote both bilateral and multilateral cooperation, said Mar'ie, who chaired the meeting.

Fuad Abdullah al-Omar, the bank's former acting president, said the bank would give a stronger emphasis on the development of the private sector in the future.

"Like other financial institutions, IDB will also pay a greater attention to the development of the private sector," he said.

IDB, with a paid-up capital of US$8.4 billion, provides most of its financing facilities to support government projects under an interest-free mechanism.

Omar said the bank has introduced a number of schemes in helping the private sector, such as export financing and leasing facilities.

"Those facilities will be expanded to promote the role of the private sector in the bank's member countries," he said.

Omar also said financing trade in member countries to promote trade among them is part of the bank's mission, besides its financing facilities for government projects.

Besides those financial instruments, the bank also operates at least 20 commercial banks to support the financing of private sector companies.

"The Portfolio investment fund worth $380 million has been developed for the same purpose," Omar said.

Regarding the call for the need to imposing lenient terms on loans for the least developed members, Omar said that the bank has actually had such a facility for several years.

"A number of financing facilities to low-income members have already carried a very low charge," he said. "But of course, we have to expand its coverage."

The meeting, which was opened by President Soeharto on Wednesday, elected Ahmad Mohammed Ali of Saudi Arabia as the bank's new president for a five-year term, replacing Osama Jaafar Faquih.

The appointment is the third for Ali.

Faquih, who was elected as the bank's president in 1993 for a five-year term, had to quit his post following his appointment as Saudi Arabia's minister of commerce.

The meeting also appointed Yansane Kerfalla, the chief of Guinea's central bank, as chairman of the bank's board of governors, replacing Mar'ie Muhammad of Indonesia.

A number of agreements were also signed during the meeting, which was preceded by a two-day gathering of the bank's board of executives.

The agreements included the bank's $52.22 million leasing facilities for electricity, vocational training and health care projects in Indonesia.

Those leasing facilities are part of around $106 million in financial assistance signed during the meeting. Other recipients included Algeria, Maldives, Benin, Burkina Faso, Guinea, Senegal, Mali, Mauritania, Morocco and Gabon. (hen)