IsDB and Indonesia Collaborate to Advance Islamic Finance Ecosystem

Jeddah, Kingdom of Saudi Arabia, 17 August 2023 –In a bid to strengthen collaboration and fortify the Islamic finance industry, H.E. Dr. Zamir Iqbal, Vice President of Finance & CFO of the Islamic Development Bank (IsDB), welcomed a delegation from Indonesia at the IsDB Headquarters today. Leading the Indonesian delegation was H.E. Dr. Juda Agung, Deputy Governor of Bank Indonesia, accompanied by Dr. Dian Ediana Rae, Chief Executive of Banking Supervision and Member of the Board of Commissioners of the Financial Services Authority (OJK).

The discussions encompassed a wide spectrum of topics, all aimed at enhancing cooperation and jointly contributing to the growth of the Islamic finance sector.

The meeting reaffirmed Indonesia's enduring partnership with the IsDB, a relationship that began when Indonesia became a founding member on August 12, 1974. Throughout the years, Indonesia's steadfast support has played a vital role in establishing the IsDB Group as a prominent multilateral development financial institution. The ongoing collaboration aligns seamlessly with the newly unveiled 2022-2025 Member Country Partnership Strategy (MCPS). This strategy harmonizes developmental solutions with Indonesia's National Development Plan, as encapsulated in the 2020-2024 Medium-Term Strategy and Vision 2045.

A notable milestone highlighted by Dr. Iqbal was Indonesia's increased subscription to the IsDB capital, approved by the Board of Governors at the 48th Annual Meeting in May 2023. This Special Capital Increase (SCI) bestows Indonesia with a permanent seat on the Bank's Board of Executive Directors. This body plays a pivotal role in shaping the Bank's operations, currently focused on the implementation of the Realigned Strategy 2023-2025.

Indonesia's remarkable strides have been supported by IsDB Group contributions amounting to approximately US$ 6.4 billion. These funds have been directed towards various pivotal sectors of the Indonesian economy, both public and private.

Dr. Iqbal lauded the alignment of IsDB's active project portfolio with Indonesia's developmental priorities. The initiatives span a diverse range of areas, encompassing projects such as slum upgrading, power grid enhancement, healthcare infrastructure, and higher education institutions.

Underlining Indonesia's pivotal stature in the Islamic finance arena, Dr. Iqbal emphasized the importance of nurturing a vibrant Sukuk market. This endeavor is poised to solidify Indonesia's role as a global hub for Islamic finance. He underscored the country's position as an issuer and investor in Sukuk issuances, reinforcing its influence in the global Islamic financial landscape.

Additionally, Dr. Iqbal affirmed IsDB's unwavering commitment to collaborate in strengthening Indonesia's Awqaf sector. The cooperation involves Waqf-based project financing and leveraging Indonesia's successful Cash Waqf-linked Sukuk issuances to promote them among IsDB Member Countries. Dr. Iqbal also outlined IsDB's support for technical assistance and advisory services within the Islamic finance sector.

The meeting concluded with a shared commitment to nurturing enduring collaboration for the mutual advancement of the Islamic finance ecosystem and sustainable development.