The Islamic Development Bank (IDB) Board of Directors has proposed to set up a Poverty Alleviation Fund with an initial capital of US$ 10 billion in accordance with the decision of the Heads of States of IDB member countries gathered at the Summit of the Organisation of Islamic Conference (OIC) held in Makkah, Saudi Arabia, in December 2005 to set up a Poverty Alleviation Fund within the IDB to tackle poverty in OIC member countries, particularly in Africa. The Kingdom of Saudi Arabia and Kuwait have already pledged US$ 1 billion and US$ 300 million respectively to the Fund for which the capital is expected to come from other member countries shortly.

This was stated in an address delivered by Dr Amadou Boubacar Cisse, Vice President (Operations), IDB, on behalf of its President, H.E. Dr Ahmad Mohamed Ali at the UN General Assembly on the occasion of the thematic debate on “Partnerships towards Achieving the MDGs”. Presently, IDB's social sector-orientated programs attract annually around a fourth of its long-term financing commitments.

The statement disclosed that the Fund, expected to start operations in mid-2007, will operate within the framework of the MDGs, with a special focus on primary education (girls’ education in particular); health (with a focus on malaria, tuberculosis, HIV/AIDs, and other major communicable diseases); infrastructure development (particularly in rural areas); agriculture; micro-finance; emergency assistance, recovery and reconstruction. The Fund will provide financing on highly concessional terms focusing primarily on twenty-five Least Developed Member Countries of the IDB in Africa and Asia.

Dr Ali’s statement reiterated IDB's commitment to strengthen its partnership with all its development partners, particularly, the United Nations System, the donor community, the private sector and the civil society, in fighting poverty, particularly in Africa. On the occasion, the IDB also signed a memorandum of understanding with the UNDP to collaborate in matters of common interest within the context of achieving the Millennium Development Goals (MDGs) in their common member countries.

He also mentioned that in consonance with the spirit of the Doha Round and the growing consensus amongst development aid practitioners that the poverty battle must be fought simultaneously on two fronts, IDB is one of the first Multilateral Development Banks to have a major trade financing program, mainly to promote intra-trade amongst its member countries. Out of the US$ 50 billion of assistance IDB has committed since its inception in 1975, more than half targeted trade finance.

IDB is also contemplating pioneering mechanisms to tap into the vast zakat resources, a pro-poor levy ordained on Muslims to be paid annually, as well as contributions from the private sector in the fight against poverty that would complement the Fund's activities.

With a membership of 56 developing countries mainly from Africa, the Middle East, Asia and former CIS countries with its main strategic objective of fighting poverty commits annually over US$ 4 billion for development projects especially in its least developed member countries for improving access to basic social services such as safe drinking water and sanitation, healthcare and primary education, and for supporting employment-generating industrial projects, infrastructure development, trade, and other growth-inducing activities.