International financial institutions stand out in times of crises, such as recession and inflation the global economy is now facing. These problems emerged from disruptions in global supply chains as production declined after the coronavirus pandemic.
Disruption in global supply chains and lowered production rates have caused international borrowing rates to rise and debts to jump to record levels. All this occurred amid warnings of a hunger and energy crisis threatening the world.
These causes and results are inseparable from accelerating geopolitical changes, which feed the instability of financial indicators worldwide. All these factors make it difficult for financial institutions to make financing decisions amid increasing pressures on low-income countries and the suffering of developing countries.
Attention turns to the Islamic Development Bank (IsDB), which serves 57 member countries, meaning that any projects and operations conducted by the institution affect one in five of the world's population.
Speaking to Asharq Al-Awsat, IsDB President Muhammad Al Jasser stressed that the Bank plans to confront development challenges worldwide.
“The Bank’s plans to meet the challenges of development in the world target seven items. This includes mitigating the adverse effects of multiple crises, enhancing resilience, supporting countries to create sustainable infrastructure, and helping human capital,” Al Jasser said.
“The IsDB works with partners and stakeholders to develop trade routes, attract investment flows, forge innovative partnerships and establish business relationships that enable contribution to regional and global value chains,” he added.
On April 4, 2020, the IsDB board approved the Bank’s Strategic Preparedness and Response Program to support member countries in preventing, containing, mitigating, and recovering from the pandemic.
The program envisages a holistic approach in the short, medium and long term, accommodating priorities beyond the immediate and emergency response to the health sector, while putting member states back on the path of economic recovery through restoring livelihoods, building resilience and kick-starting economic growth.
The IsDB has committed more than $4.5 billion to respond to the pandemic and to restore the economic recovery of member states.
“The outlook for global economic growth and recovery in the medium term is characterized by significant uncertainty and deflationary risks,” warned Al Jasser.
“While the negative effects of the pandemic are still hanging over many economies, the conflict in Eastern Europe and the devastating floods in a number of member states have set back prospects for a rapid recovery,” he added.
Regarding IsDB’s position and plans to deal with capital in this critical economic situation, Al Jasser said: “We look forward to expanding our sustainable financing activities, including developing our cooperation with (Nasdaq Dubai), the international stock exchange in the region.”
He pointed out that the IsDB listed on Nasdaq Dubai on April 29 sukuk at a value of $1.6 billion.
