Tue, 23 Aug 1994

IDB offers aid to help increase trade relations

JAKARTA (JP): The Islamic Development Bank (IDB) is offering financial aid for Indonesia's development projects and foreign trade to promote trade relations among Islamic states, Minister of Finance Mar'ie Muhammad says.

"This year, for example, the bank is committed to providing aid for the development of an Islamic hospital in Bandung," Mar'ie told reporters yesterday after meeting with IDB's delegates led by the bank's vice president, Fuad Abdullah Al- Omar.

Fuad was accompanied by IDB's executive director for Brunei, Indonesia and Malaysia, Dato Ahmad Hassan Osman, law consultant Mohamed Fateh El Hamid and head of the operations division Farook Uz Zaman yesterday.

Mar'ie said that IDB has agreed to appoint the state-owned Bank Pembangunan Indonesia (Bapindo) to act as its agent for dealing with long-term trade financing.

"I hope the cooperation will soon be introduced to various commercial banks in the country to support the country's export- import activities," he said

Secretary General of the Ministry of Finance Jusuf Anwar said that IDB and Bapindo have long been involved in cooperation in the so-called equity financing scheme.

Jusuf said that agreements on the aid for the hospital project and the trade financing scheme for Bapindo will be signed this week.

The IDB delegates are here to meet with State Minister of National Development Planning/Chairman of the National Development Planning Board (Bappenas) Ginandjar Kartasasmita, Minister of Education and Culture Wardiman Djojonegoro, Governor of Bank Indonesia Soedradjad Djiwandono and executives of state banks and the National Agency for Export Development (Nafed).

Mar'ie, who is also the IDB's governor for Indonesia, said that the delegates' visit is to explore opportunities to provide loans for Indonesia's big projects.

The 47-member IDB, set up in 1975 under an Islamic Sharia law which bans usury, does not earn interest on credits extended to its members. Indonesia is one of the IDB's founders.

Mar'ie said that officials of his ministry will promote the IDB financial assistance to business people in Jakarta, Surabaya of East Java and Medan of North Sumatra. "The IDB is also providing scholarships for students and experts to improve their skills."

The IDB last year raised its paid-up capital to some US$6 billion. It has channeled $15 billion in credits to its members so far. (fhp)