JEDDAH: Islamic Development Bank President Ahmed Mohamed Ali called for a new economic order to promote global progress and prosperity at the group’s annual conference here Monday.
“I call upon Islamic financial institutions to make use of the available opportunity to establish international investment banks in order to present a new vision and a different methodology to the world in asset management and fund investment … and contribute to the reform of global financial system and stability,” Ali said at the event, which attracted the participation of over 1,000 delegates including ministers, economists, businessmen and bankers. (source)
Addressing a forum on managing liquidity and enhancing the size of Islamic financial institutions, the IDB chief said the total assets of Islamic banks and financial institutions are expected to exceed $1.5 trillion by 2012.
“Islamic banks contributed to financial and economic stability during the crisis, given that their credit and asset growth was at least twice as high as that of conventional banks,” he said quoting a survey conducted by the International Monetary Fund.
The conference, which includes a meeting of IDB’s board of governors attended by 56 finance, economy and planning ministers from the Organization of the Islamic Conference countries, will reach its peak on Wednesday when Custodian of the Two Holy Mosques King Abdullah addresses the gathering. Finance Minister Ibrahim Al-Assaf will lead the Saudi delegation in the meeting.
During the five-day conference about 35 forums, seminars and other events will take place with the participation of experts from different parts of the world.
They include a forum on the role of the private sector in developing a road map for enhancing intra-OIC trade and a seminar on marginal water utilization in agriculture with special reference to Saudi Arabia.
Highlighting the progress achieved by the Islamic banking system during the past four decades, the IDB president said Islamic banks have been opened all over the world and won greater acceptance following the recent global economic crisis. “It has covered all sectors of the banking industry including trade and investment as well as non-banking services,” he pointed out.
Ali also spoke about the challenges facing the Islamic banking sector and urged greater efforts from Islamic financial institutions and experts to confront them. He said most Islamic banks have achieved considerable liquidity. However, he called for innovating new products for liquidity management and inventing ways to make use of short-term funds for long-term finance.
The IDB chief emphasized the role of Islamic banks in strengthening national economies by achieving a high rate of production efficiency and safeguarding financial stability in their countries.
Waleed Al-Wohaib, CEO of International Islamic Trade Finance Corporation (ITFC), said IDB intra-trade rose from 14 percent in 2004 ($333 billion) to 16.6 percent in 2010 ($456 billion).
He was optimistic that ITFC would be able to achieve the intra-trade target of 20 percent by 2015, which was set by the OIC summit in Makkah. The IDB had given $38.7 billion to finance trade deals of member countries since January 2008 to the end of December 2010.
Muhammad Ali, managing director of Social Islamic Bank in Bangladesh, said Islamic banks occupy 20 percent of total deposits and finance 18 percent of total investment in his country. “Islamic banks are production-oriented and can play a big role in the development of any country,” he told Arab News. “They will boost GDP, reduce income disparity, control inflation and increase jobs.”
Since its inception in 1975, the IDB has provided finance worth more than $70 billion for social and economic projects. Of the total funds, 40 percent has gone to finance projects and technical assistance, 58.8 percent to finance trade and 1.2 percent as grants to support Muslim communities. In 2010 alone, IDB gave $7 billion to finance 363 foreign trade deals.
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