IDB Group is scaling-up operations by an additional US$2.5 billion to assist OIC member countries address challenges of global financial crisis
Dr. Waleed Al Wohaib, CEO of the International Islamic Trade Finance Corporation (ITFC) headed a delegation of officials from the Islamic Development Bank (IDB) Group at the 2nd Global Review of the World Trade Organization (WTO) Aid for Trade initiative.
Held in Geneva, July 6-7, 2009, the event was organized to evaluate progress made since the First Global Review in 2007 with the key objectives of moving from commitment to implementation, mainstreaming trade in national and regional development strategies, sustaining trade flows during the global economic downturn, and assessing the effectiveness of Aid for Trade.
Speaking on behalf of IDB in a session chaired by Pascal Lamy, WTO Director General, on the subject from commitment to implementation, Dr. Al Wohaib pointed out that Aid for Trade is at the heart of the IDB Group’s mission and vision and synergistic with ITFC’s brand promise Advancing Trade, Improving Lives.
He went to describe how the spillover from the global economic crisis has hit the world’s poor countries hard through faults not of their own making. In view of this and to help offset the impact of the crisis, the IDB Group is scaling-up its operations to assist OIC member countries by an additional US$2.5 billion to increase its annual growth rate from 15 percent to 30 percent over the period 2009-2011.
Supporting the need for this increase, Dr. Al Wohaib stated that no country or region in the world has grown successfully without large expansion of trade, adding that trade has a very special importance for the Islamic Development Bank Group and its 56 member countries due to its critical role in poverty reduction, growth and development.
In 2007 overall trade of the IDB member countries stood at US$2.6 trillion, representing more than 9 percent of all world trade and during the pre-crisis period member countries experienced significant expansion in trade, both across themselves and with other countries.
Pointing out that the International Islamic Trade Finance Corporation (ITFC) was established to better achieve IBD Group objectives, which include meeting the OIC target to increase intra-OIC trade volumes from 15 percent in 2005 to 20 percent by 2015, Dr. Al Wohaib outlined a number of strategic initiatives for enhancing intra-OIC trade
It is the ITFC trade facilitation program that reinforces WTO's efforts in Aid for Trade helping developing countries increase their participation in world trade by articulating national and regional priorities.
Dr. Al-Wohaib noted that, while intra-OIC trade has risen from 14 percent (US$333 billion) in 2004 to around 17 percent (US$421 billion) in 2007, the share of OIC trade to the world remains low considering OIC member countries account for 20 percent of the world population and many have abundant natural resources such as energy, minerals and agriculture.
Highlighting IDB’s pioneering role among multilateral development banks during three decades of trade financing, Dr. Al Wohaib emphasized the IDB Group’s special role in the development of the private sector, reporting that in 2008 US$347 million was approved for 33 private sector operations, while overall 28 member countries have received trade financing assistance for 132 projects exceeding one billion dollars.
Turning to the development trade–related infrastructure, particularly transport, communications and energy, Dr. Al Wohaib stated that over the years IDB has financed more than 2000 infrastructure and related operations with a contribution of US$17.5 billion.
Concluding his address with the IDB Group’s new vision for 2020: A Vision for Human Dignity, which prioritizes five key areas for poverty reduction, with business and trade development as core elements, Dr. Al Wohaib reiterated the overriding importance that the IDB Group attaches to trade promotion and assured the WTO Global Review attendees of ITFC’s continuing support and cooperation with other international financial institutions and partners on Aid for Trade.
