Opening Remarks of IsDB President During a Press Conference in Washington

Despite the financial crisis engulfing the marketsand the current market conditions, I am pleased to inform you that the Islamic Development Bank (IsDB) Group is financially strong and will be able to meet its commitment to member countries and conduct normal operations. This result is an outcome of certain factors: IsDB’s investment operations are conducted according to Islamic sharia, and hence, it is not exposed to products linked to any sub-prime mortgages.

Moreover, IsDB enjoys strong financial position given its large capital base of 15 billion Islamic dinars (US$23 billion). Yet as an international financial institution and given the current crisis, IsDB will face some challenges, but given its strong financial base, the strong and continuous support it gets from its shareholders, the member countries and the good credit ratings it enjoys from the three top rating agencies: Standard & Poor’s, Moodys and Fitch.

As a result IsDB is in a better position to cope with the unfolding challenges. One of the main challenges is the expected impact of the crisis on our 56 member countries. Though the picture is not yet clear as the crisis is still unfolding, but it is obvious that credit availability will be severely curtailed, with rippling impact on food crisis, MDGs and other economic activities.

We in IsDB, find ourselves in a relatively stable position as a number of initiatives the Group started have already gone into implementation, thus helping our member countries in a way to face up to the global financial crisis. For those who were here during the press conference I held alongside the World bank/IMF annual meetings last year, they may recall that we spoke about the Islamic Solidarity Fund for Development (ISFD), which IsDB was launching to help combat poverty in its member countries. I am glad to inform you today that the fund was launched on time last January.

Two programs one dealing with microfinance and the other with vocational training in member states became operational. Not only that, but last March, IsDB launched a new 5-year Special Program for the Development of Africa (SPDA) as a follow up to the Ouagadouguo Declaration 2003-2007, named after the capital of the west African country Burkina Faso. Originally scheduled to pledge US$2 billion, the actual performance of Ouagadouguo Declaration surpassed the target committing US$2.4 billion.

The new program, which covers the period 2008-2012, is committing US$4 billion. Moreover, IsDB hopes to mobilize between US$3-4 against every dollar it spends from other partners. A good example of such activity is the Kandadji Dam in Niger and Taossa Dam in Mali to provide water and electricity to the two west African countries where nine development institutions including the World Bank are participating. IsDB commitment to Africa stems from the fact that it represents the biggest regional block with 27 member countries and there are an estimated 360 million people who live below the poverty line of one dollar a day.

Moreover, during its annual meeting in June and as a response to the growing food crisis, IsDB announced the Jeddah Declaration that calls for providing US$1.5 billion over a 5-year period using its own resources as a group to help affected member countries meet the new challenges. During the four months period following the Jeddah Declaration, IsDB has initiated ten projects in ten different member countries to be financed from allocation made this year to the tune of US$178 million, in addition to US$52 million in trade operations for three countries to help supply improved seeds, fertilizers and equipment to boost food production.

However, these three initiatives on poverty reduction, special program for Africa and food, found their way to implementation during the summer. A 5-year agreement was signed with Senegal where IsDB will help mobilize US$1.5 billion from the IsDB Group, private sector and other resources. A similar deal was signed with Niger to help mobilize US$1 billion and a third one to provide US$700 million was signed with Mauritania. Investments will go into priority areas for these countries like agriculture and livestock and so on.