The American Consulate in Jeddah hosted, on Monday May 18th HE Dr. Bandar Hajjar, President of the Islamic Development Bank Group, in a virtual meeting that brought together the Saudi and American private sectors, to introduce the IsDB Group and its role to serve the private sector, and highlight investment opportunities resulting from the Bank's operations in member countries under its new business model.
Mr. Ryan Gliha, the US Consul General, and the American Representative in the OIC, welcomed Dr. Bandar Hajjar, praising his new vision in promoting the development methodology of the Bank through the new business model presented by Dr. Hajjar, noting that the Bank is unique in the adoption and implementation of this new approach. He also appreciated the Bank’s interest in the private sector as one of the main pillars of the Bank’ strategy in promoting development activities in member countries.
Dr. Hajjar praised the initiative of the American consulate to strengthen the relationship between the IsDB Group and the American private sector. He offered a detailed presentation on the Bank since establishment until becoming an integrated Group whose volume of accumulated approvals since inception reached US$145.1 billion, including US$83.4 billion for project finance and US$61.6 billion for trade finance. The Group also provided US$ 63.7 billion for investment insurance and export credit, while it provided US$5.4 billion for the development of the private sector through the ICD, its private sector arm
Dr. Hajjar touched on the challenges facing member countries noting that the first challenge is to generate new jobs for about 10 million young men and women who enter the labor market annually in the 57 member countries, and by 2030 the number will reach 100 million, stating that the continuation of this situation will have economic, social and security implications. “The second challenge is the persistence of the trade deficit. There are 22 sectors of 25 that suffer from a trade deficit, with exports focusing on raw materials that do not create jobs and with no added value, but through which jobs are exported abroad, and the third challenge is the financing and investment gap where our member countries need one billion Dollars annually to implement the SDGs, of which 700 billion to be invested in infrastructure, and that the total finances of MDBs do not to exceed US$150 billion” he said.
Dr. Hajjar highlighted the IsDB new business model which focuses on value chains according to analytical foundations, and the industrial transformation based on the solutions of the fourth industrial revolution through defining strategic projects, and the mobilization of market resources through the provision of guarantees and crowdfunding. “STI is one of the main pillars of the Bank’s strategy, as this sector is expected to play an important role in reducing the gap between developing and developed countries, and the Bank’s new strategy focuses on the role of advanced technologies to achieve the required developmental leapfrogging” he said. He noted that the Bank has allocated a US$ 500 million Fund to support innovation and entrepreneurs who come up with solutions that help address the multiple challenges facing member countries. “The Bank’s new business model calls for mobilizing one trillion dollars annually from international markets to invest in five strategic industries in member countries, and these would create ten million jobs” he said, adding that these industries were chosen based on the cooperative advantages enjoyed by each country. He indicated that the Bank is issuing five reports related to these industries.
The role of the local and foreign private sectors in supporting the Bank’s vision in accordance with the new business model was also discussed. He stressed that the role of the private sector investments is pivotal, as it benefits from the Bank's high credit rating in reducing the risks of individual investment. “The partnership between the public and private sectors, which strongly supported by the Bank, allows everyone to participate in economic and social development activities in member countries” he said.