Thirty-First Annual Meeting of the Board of Governors


The Thirty-First Annual Meeting of Board of Governors of the Islamic Development Bank Group was held in the city of Kuwait, State of Kuwait, during the period 3-4 Jumada I, 1427H (30-31 May 2006) under the patronage of H.H. Sheikh Sabah Al Ahmad Al Jabir Al Sabah, the Amir of Kuwait.

 

The Board of Governors concluded its Thirty-First Annual Meeting, with many important resolutions. These included resolutions to double the IDB capital to US$ 40 billion; establish a fund for poverty alleviation and signing the Articles of Agreement for establishing the International Islamic Trade Financing Corporation (IITFC). This is in addition to launching a package of projects worth US$ 100 million for infrastructural projects in Palestine.

 

The resolution to establish the Poverty Alleviation Fund (PAF) came in response to the 3rd Extraordinary Islamic Summit Conference held in Makkah Al Mukarramah in December 2005, which entrusted the IDB Board of Governors with the task of establishing a special fund for alleviating poverty and unemployment and creating employment opportunities in member countries, as well as the task of proposing the mechanisms and means to secure the resources required for the fund, which should be in the tune of five billion US dollars to ensure a strong start for the fund and to meet the urgent strategic needs calling for its establishment. On this occasion, the Board of Governors has unanimously agreed to a motion of thanks and appreciation to the Custodian of the Two Holy Mosques, King Abdullah Bin Abdul Aziz, for his initiative of calling to convene an extraordinary summit conference in Makkah Al Mukarramah, approval of the PAF under the umbrella of the IDB and the generous contribution allocated by him to the initial resources of the Fund, which amounted to US$ 1 billion.

 

The Board of Governors decided to assign the Board of Executive Directors the task of immediately taking the measures necessary to establish the PAF. It also urged member countries to declare their contributions to the Fund and to lend it the support needed. The Board of Executive Directors was also requested to submit a report to the Board of Governors on this subject at its earliest convenience.

 

In implementation of the directive of the 3rd Extraordinary Islamic Summit Conference, which calls for a substantial increase of the IDB capital to enable it strengthen its role in lending financial support to its member countries, the IDB Board of Governors decided to double the authorized capital of the IDB from ID 15 billion to ID 30 billion (equivalent to about US$ 40 billion), increase the subscribed capital by ID 6.9 billion (equivalent to about US$ 9.2 billion) to become ID 15 billion (equivalent to about US$ 20 billion).

 

The first day of the BOG meeting witnessed an important event, that is the official declaration of the International Islamic Trade Financing Corporation joining the IDB Group as a new member, where 43 IDB member countries signed the Articles of Agreement of the new Corporation, with an authorized capital of US$ 3 billion and a capital offered for subscription of US$ 500 million. The establishment of this Corporation comes in harmony with the initiative of the Kingdom of Saudi Arabia, which called for promoting intra-trade among OIC member countries, which was submitted to the 10th Islamic Summit Conference held in Malaysia, and with the proposal of the U.A.E. presented to the 29th Annual Meeting of the IDB Board of Governors held in Tehran, which called for establishing an international Islamic trade financing corporation to support and promote intra-trade among OIC member countries. It has been decided to hold the first meeting of the new Corporation's General Assembly next September at the IDB headquarters.

 

Among the activities that took place at the side of the IDB Annual Meeting, a meeting was held by the Supreme Council of Al Aqsa and Al Quds Funds, under the chairmanship of H.E. Mourad Medelci, Minister of Finance, Democratic and Popular Republic of Algeria. The Council called upon member countries of the two funds to increase their contributions to the financial resources of these funds. It also urged those countries which had not yet contributed to the capital of these funds to do so. These funds were established by the Arab Extraordinary Summit Conference, which was held in Cairo in the year 2000, on the basis that support to these funds would be a support to the steadfastness of the Palestinian people and an effort aiming at mitigating the results of occupation practices and the daily suffering of unarmed population there in the form of invasions, arrests and infrastructure destruction. The Supreme Council of the two funds declared the launching of a package of new projects amounting to US$ 100 million, covering important sectors in Palestine, such as education, health, rehabilitation of the infrastructure, economic enabling of needy families, creation of new job opportunities and promoting employment opportunities with the private sector.

 

The Chairman of the Supreme Council of the two funds explained that, within the context of assistance extended through these two funds to date, a total of about US$ 686 million has been disbursed, which helped construct tens of thousands of houses, roads, schools, water and electric lines, in addition to the provision of health care and education services to the categories of people most affected by aggression. The two funds also worked towards rehabilitating hospitals, reclamation of agricultural lands, provision of water-wells-based irrigation, printing of millions of school textbooks, in addition to the provision of scholarships to enable male and female students continue their university education. Interest-free loans were also provided to establish small projects and support to the budget of the Palestinian Authority was given.

 

Many important meetings and symposia were held this year at the side of the Annual Meeting of the Board of Governors. Among these was the symposium entitled "Role of the Private Sector and Financial Institutions in Promoting Intra-trade, Intra-investment and Joint Ventures in the IDB Member Countries". The Symposium stressed the importance of the role of the private sector in the development and prosperity of the economy of member countries through the promotion of intra-trade, intra-investment and joint ventures. It also emphasized that the best way to succeed in this field is through the forging of strategic partnership for geographical expansion, penetrating new markets and giving attention to agriculture and the business sector, while stressing the importance of finding innovative solutions for trade financing, intra-investments and promoting the role of institutions in financing and guaranteeing trade and investments, as well as the importance of cooperation between IDB and the Islamic financial institutions subscribing to the rotation of surpluses in member countries through the establishment of Islamic investment funds, intensification of experience and information exchange among member countries, lending support to capacity building, creation of coordination networks and the importance of the role that could be played by the private sector in member countries in realizing these objectives. The key speaker in the Symposium was H.E. Sayed Muhammad Khatami, former President of the Islamic Republic of Iran.

 

During the Annual Meeting, a ceremony was held to award the IDB Prize in Islamic Banking and Islamic Financial Services for 1426H (2005), whose winner this year was H.R.H. Prince Muhammad Al Faisal Al Saud (received on behalf of H.R.H. by Mr. Muhammad Abdul Rahman). The Prize was awarded in appreciation for His Royal Highness' pioneering and distinctive efforts in the field of developing the concept and business of Islamic financial services, as well as for his pioneering role in firmly establishing the first Islamic financial institution, namely Dar Al Mal Al Islami, in addition to his role in establishing many Islamic banks, Islamic takaful and investment companies.

 

Three prizes were awarded in the fields of science and technology that are allocated annually to encourage distinguished research centers in member countries. The Prize was won this year, 1427H (2006) by three institutions: the Board of Directors of the Malaysian Palm Oil Board (MPOB) in appreciation for the prominent role they played in realizing economic and social development in Malaysia; the Faculty of Engineering of Cairo University, Egypt, in appreciation of the Faculty's efforts in developing modern engineering sciences. The third Prize for distinguished scientific research institutions in member countries was awarded to the Faculty of Science of the Islamic University, Gaza, Palestine, in appreciation for its distinguished efforts in the fields of institutional building.

 

Other prizes were also awarded for the first time by the IDB, namely the IDB Prize for Women Contribution to Development, for both individuals and institutions. The first prize (for individuals) was awarded to self-made women who have micro-projects (total Prize value amounted to fifty thousand US dollars). The Prize was awarded jointly to Mrs. Fatimah Abdul Rahim Al Jada', owner of a sewing workshop in Qalqiliah in Palestine and Mrs. Nofah Qtaifan Al Fayez, owner of a project for the manufacture of dairy products in the border city of Al Azraq in Jordan, for her role in establishing and operating two productive projects that provided job opportunities for many limited-income women. Regarding the IDB Prize allocated to women institutions and NGOs (with a total value of US$ 100,000), the Committee decided to split it among three women institutions in three member countries as follows:

The annual meeting of the IDB Board of Governors also witnessed the convening of the 13th Annual Meeting of the Board of Governors of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).


H.E. Dr. Ahmad Mohamed Ali, President of the IDB Group described the resolutions made by the Board of Governors as very important and that, God willing, they will contribute to the promotion of current ways of cooperation among IDB member countries in a manner that would serve the interests and aspirations of our Muslim Ummah.

 

The IDB Board of Governors expressed their heart-felt thanks to H.H. Sheikh Sabah Al Jaber Al Ahmad Al Sabah, the Emir of the State of Kuwait, for personally inaugurating the 31st Annual Meeting of the IDB Board of Governors and for the detailed speech H.H. delivered and the wise ideas it contained, where it was decided to include it among the official documents of the Board.

 

The Board also expressed its profound and sincere thanks and appreciation to the State and people of Kuwait for the warm welcome, hospitality and excellent preparations made to render the meeting of the IDB Board of Governors successful, as well as all the activities accompanying it.

 

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