ARABNEWS.COM - Oct. 03--Islamic finance got an important airing at the 2011 annual
meetings of the World Bank Group/International Monetary Fund (IMF) held
in Washington last week when Ahmad Mohamed Ali, president of the Islamic
Development
Bank Group (IDB) was invited for the first time to address the
influential 84th Development Committee meeting of the World Bank as an
observer. (source)
This year's meeting of the Development Committee, explained Ali, "is
taking place at a period when the global economic recovery is threatened
by multiple problems including supply shocks (soaring oil prices and
Japan's earthquake), financial shocks (euro zone and US debt crises and
downgrade of US credit rating), high unemployment, famine and hunger in
the Horn of Africa, social unrest in the Middle East and North Africa,
and food crisis".
While Ali went on to also discuss his concerns over global economic
recovery; the economic growth and prospects in IDB member countries; and
the group's responses to the needs of the MENA countries, especially
those ones undergoing political and economic transformation, he failed
to take the opportunity to put the case for the role of Islamic finance in promoting economic growth and contributing to financial stability.
He instead urged IDB member countries need to bolster domestic and
regional markets through a coordinated intra-investment and intra-trade
agenda that distribute production of goods and services among countries
based on comparative advantage; and to enhance human development and
critical infrastructure to create incentives for effective private
sector growth that create jobs. In some MENA countries, for instance,
youth unemployment ranged between 35 to 40 percent.
He expects economic prospects of the MENA countries to improve in 2012
mainly due to contribution of Saudi Arabia and Turkey, who are also
members of the G20 and who have "sufficient fiscal space to provide
countercyclical fiscal stimuli to support economic recovery".
The IDB has formulated a multi-tiered program to assist the affected
Arab countries in achieving better alignment between economic growth and
employment generation objectives, particularly through support to SMEs
and improved access to microfinance facilities. For instance, the IDB
along with International Finance Corporation (IFC) and the World Bank
established an "Arab financing facility for infrastructure", which will
mobilize new resources of up to $1 billion to support inclusive economic
growth objectives.
The IDB along with the World Bank, the Arab Fund for Economic and Social
Development (AFESD), the African Development Bank (AfDB), the European
Investment Bank (EIB), the Agence Francaise de Developpement (AFD) and
the Arab Trade Financing Program (ATFP) are also in final stages of
establishing a "cross-border trade facilitation and infrastructure
program."
The IDB and the IIFC are also mobilizing in the range of $1.5 billion to
$2 billion over the next five years to support job creation
opportunities and provision of relevant labor market skills for the Arab
youth.
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