Azerbaijan, Baku, March 2 / Trend A.Badalova /
Trend interviewed President of the Islamic Development Bank (IDB) Dr. Ahmad Mohamed Ali Al-Madani.
Trend : In 2010 the Islamic Development Bank for the first time will hold the annual meeting of the IDB Board of Governors in Baku. What are the reasons for choosing Azerbaijan for organizing the annual meeting, and what issues are included in the agenda?
Al-Madani: The decision on where to hold an Annual Meeting of the IDB is taken by the Board of Governors - BOG (i.e. the highest authority of the IDB where all member countries are
represented at Ministerial level) upon a recommendation submitted by the Board of Directors.
The starting point is of course the invitation that a member country sends to the IDB for hosting such Annual Meeting. The matter is reviewed and, if it found that the said member country has the facilities that are needed and is ready to make the necessary arrangements, then a decision is taken by the Board of Governors, keeping in mind the schedule of meetings agreed earlier.
It is important to mention that the Annual Meeting is not only a meeting of the Board of
Governors of the IDB: it is also a meeting of the Board of Governors/General Assembly of four other Entities and Funds of the IDB Group.
- Islamic Corporation for the Insurance of Investment and Export Credit.
- Islamic Solidarity Fund for Development.
- Islamic Corporation for the Development of the Private Sector.
- International Islamic Trade Finance Corporation.
On the occasion of the Annual Meeting, there are also a number of side activities and
meetings, seminars, workshops that are organized, for instance with the Federation of Consultants
from Islamic Countries, the Association of Development Finance Institutions of IDB Member
As far as the agenda is concerned, the BOG agenda of this year will include a number of
routine matters (such as approval of annual report, etc) but it also has other "non routine"
items such as the consideration of the request of one member country (i.e. Nigeria) to
increase its participation in IDB capital.
As for the agendas of the other meetings, they are indeed very rich and diversified and touch
upon several important topics (such as food security, the development of Islamic financing,
the promotion of trade among member countries, the promotion of investments in the region, etc.).
Q: What are the results of the bank's activity in 2009? How do you estimate your activity in Azerbaijan? Has the world crisis affected the financial operations of the bank in the region, and in particularly in Azerbaijan?
A: In 2009, the IDB approved US$201.5m for Janub Power Plant Project under Istisna`a financing and in terms of approval, this project is the biggest project that the Bank approved in Azerbaijan since its joining to the Bank in 1992. We can estimate the Bank`s activity as a very positive and in the context of global financial crisis, the Bank scaled up its projects in the region and the above approval shows the Bank`s strong commitment to pursue impact-oriented and client-faced strategy in Azerbaijan.
Q: Is the bank ready to expand the financing of the projects in Azerbaijan without getting the state guarantee? In which spheres of economy can this cooperation be established?
A: For the private sector development (SME development) purposes the Bank provides SME with financing through eligible local banks/financing institutions. This is a specific developmental tool, targeting the SME development in specific sectors / areas, such as agriculture, poverty alleviation, poor/ women empowerment, providing finance to most deprived and disadvantaged areas within the country. Plus, IDB Group already have extensive operations through its subsidiaries / entities, such as ICD and ITFC, UIF fund, already engaged in non-sovereign project financing in Azerbaijan.
Q: Can the IDB consider the possibility of financing of the regional projects with the participation of Azerbaijan and which areas can be priority?
A: The priorities have to be discussed with the Government of Azerbaijan. The IDB Group is launching Member Country Partnership Strategy (MCPS) in its member countries, where the IDB Group and concerned government identify priority sectors where the IDB Group has to focus its resources in medium to long run. At the same time, the Bank financed some road projects being part of different international corridors, such as Ujar-Yevlakh-Ganja road which is a part of international corridor linking Azerbaijan to Europe through Georgia.
Q: How do you estimate the economic situation in Azerbaijan in the period of crisis and how has the country prepared for the post crisis period? Support of which sectors of Azerbaijan's economy would be appropriate today?
A: This requires extensive macroeconomic research and analysis, and it would be rather difficult to try to respond to this broad question ad hoc. However, in general we can say that AZE economy demonstrated somewhat resilience to the most negative adverse effects of the crisis. Plus, due to carefully selected and wise interventions of the Government of Azerbaijan and Central Bank, the banking / financial sector was stabilized and survived.
Q: How possible is the introducing of Islamic banking in Azerbaijan today? How can the bank assist Azerbaijan in this process?
A: Yes, IDB on numerous occasions demonstrated its interest in developing - in close cooperation with the concerned authorities in Azerbaijan, the Islamic Banking and Finance. IDB is very keen on this topic, as it is one of the primary objectives of the Bank along with its developmental objective. The Islamic Research and Training Institute (IRTI), which is one of the IDB Group affiliates is providing member countries with research and training facilities in these fields and the IRTI is actively working with concerned focal points in the country to spread the knowledge in Islamic Banking and Finance.