Finance Minister AMA Muhith has urged governors of the Islamic Development Bank (IDB) to push for a community-based partnership and come out of traditional financing models for a prosperous Islamic world.
Muhith suggested leaders of the Islamic countries should work together to pull up the OIC (Organisation of Islamic Cooperation) region towards achieving healthy human development and securing strong, sustainable economic growth.
He was speaking to OIC leaders at the 40th annual meeting of the Islamic Development Bank Group at Maputo, the capital of Mozambique, as a leader of the Bangladesh delegation yesterday.
He advocated promoting supportive governance and strengthening peace and stability in the Islamic world and outside by fostering a powerful sense of common identity and destiny, according to a statement.
Currently, IDB's support for low-income members is stymied by not just a lack of adequate development funds but by its relatively higher cost as well, Muhith said.
“I thank the IDB and the Bill and Melinda Gates Foundation for creating the 'Lives and Livelihood Funds' that will provide up to $2.5 billion over five years to the low-income countries.”
The mix of grant money with Shariah compliant loans will help countries like us to lower our cost of capital as it raises the grant element of IDB loans above 35 percent, Muhith said.
IDB's undertaking in the Member Country Partnership Strategy has advanced the aid effectiveness agenda in terms of alignment with government priorities, as strategic partnership between donor and recipient and predictability of financing has been created, he said.
The minister also hoped for greater integration among IDB member countries in reverse linkage, such as trade exchanges, transfer of technology, cross-border investments, and sharing of country experiences.
Muhith said Bangladesh's economy has gained a solid macroeconomic foundation. “The annual GDP growth last year was 6.2 percent and we are expecting it to be 6.6 percent this year.”
Bangladesh is one of the largest recipients of IDB funds, said the minister. “We have an active portfolio of about $1,850 million, including trade finance.”
Of a total of $17.17 billion as approved by IDB till date, $15.45 billion is trade finance and $1.72 billion is project finance, of which about 10.5 percent is from IDB's concessional window and 89.5 percent is non-concessional, the minister said in the statement.
To be specific, the annual allocation of ordinary concessional window for Bangladesh is only $20 million which is insufficient, he said.