IDB urged to ease terms for certain members
IDB urged to ease terms for certain members
JAKARTA (JP): President Soeharto urged the Islamic Development Bank (IDB) yesterday to relax the terms of its assistance for heavily indebted countries.
The President said that heavy debt burdens have hampered economic growth in many of the bank's member-countries.
"In this connection, we applaud the initiative taken by Kuwait and Saudi Arabia to write off the debts of a number of the bank's member-states," Soeharto said in his speech at the opening of the 20th annual meeting of the board of governors of the Jeddah-based IDB.
Indonesia, which chaired the Non-Alignment Movement (NAM) in the 1992-1995 period which ended last month, initiated discussion on a possible solution to the debt problems of developing nations.
NAM, now chaired by Colombia, is expected to continue seeking a solution to the debt problems, he said.
The board of the governors will review the bank's activities and its financing operations during the two-day meeting, which will end today.
The meeting, attended by about 350 delegates from the bank's 48 member-countries, will also elect a new president to replace Osama Jaafar Faquih, who has been appointed Minister of Commerce of Saudi Arabia.
The main agenda also includes consideration of the applications of Mozambique and Kazakhstan to join the bank and the approval of the bank's financial reports.
Cooperation
In his address, Soeharto also called on the bank's member- countries to promote economic cooperation both on bilateral and multilateral bases as an alternative to offset the decline of capital inflows from developed nations.
"The purpose is to see to it that investment and unhindered trade will stimulate the economic growth of the bank's member states," he said.
The bank's member-countries should prepare themselves to face tougher competition as a result of economic globalization, Soeharto said.
"Whether we like it or not, we have to take part in economic liberalization and free trade, if we don't want to be left behind," the President said.
IDB, with paid-up capital of about US$8.4 billion, was established in 1975 to provide loans and other financing facilities for member countries under an interest-free mechanism. The financing facilities are mostly based on profit-sharing arrangements.
Soeharto called on the bank to further expand its mechanisms, which conform to Islamic law while remaining compatible with conventional banking systems.
The bank's acting president Fuad Abdullah al-Omar said that the IDB is committed to giving greater attention to its least- developed members.
In his speech at the opening ceremony, Omar said that the bank would also further enhance its financing facilities for the private sector through its financing arms.
The IDB's board of executive directors approved US$222 million in financial assistance to members and non-member countries during the preparatory gathering on the eve of the board of governors' meeting.
The lending facilities will be used to finance infrastructure and educational projects in Indonesia, Turkey, Chad, Beirut, Morocco and Qatar.
Indonesia will receive about $25.46 million of the funds for the expansion of the Ujungpandang airport in South Sulawesi and another $12.43 million for the upgrading of air traffic control equipment. (hen)
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