PRESS CONFERENCE BY VICE-PRESIDENT OF ISLAMIC DEVELOPMENT BANK

A proposed $10 billion poverty alleviation fund created by the Islamic Development Bank would become fully operational in mid-2007, Amadou Boubacar Cissé, the institution’s Vice-President, said today at a Headquarters press conference organized in connection with the General Assembly’s informal thematic debate on “Partnerships towards Achieving the Millennium Development Goals:  Taking Stock and Moving Forward”.

He said today’s announcement of the fund followed a decision made by Heads of State of the Bank’s member countries during the December 2005 Summit of the Organization of the Islamic Conference (OIC) in Makkah, Saudi Arabia.  That country had already pledged $1 billion to the fund.   Kuwait had promised $300 million and other members were expected to contribute shortly.  The Bank was currently committing more than $4 billion a year to development projects to improve access to basic social services, support infrastructure and trade.

The 56-member Islamic Development Bank is a multilateral institution comprising developing countries in Africa, the Middle East, Asia and the Commonwealth of Independent States, with a mandate to combat poverty.  The Fund would operate within the framework of the Millennium Development Goals and focus on primary education (especially for girls); health (malaria, tuberculosis, HIV/AIDS and other communicable diseases); infrastructure; agriculture; microfinance; emergency assistance; and recovery and reconstruction.  Financing would be provided on concessional terms, primarily for the 25 least developed Islamic Bank members.

Mr. Cissé, a former Prime Minister of Niger with two decades of experience at the World Bank, said today’s informal debate had provided a good opportunity for the Bank to discuss ways to improve its operations and revive cooperation with such long-term partners as the United Nations Development Programme, United Nations Industrial Development Organization, World Health Organization, International Fund for Agricultural Development and the World Bank.

Asked about the fund’s size and whether it would be available exclusively for Islamic countries, he said the Board of Governors was expected to approve a Charter in May.  The Bank was trying to increase its current activities and the fund had been conceived as a “solidarity fund”, whereby all members would contribute.  Thus far, 17 of the 56 member countries had contributed and all major shareholders were expected to announce their contributions by May.  The fund was expected to start with $10 billion within a year.

The fund would be available for the 56 member countries, he added, stressing that financing terms would be compatible with sharia.  That meant the Bank would focus on covering its administrative costs only.  Allocations to the fund would be considered grants, and loans would be made under specific criteria.  Resource replenishment would be considered a procedural issue to be resolved by May.

On whether the Bank would allocate funds to individuals, Governments or institutions, he noted the Bank’s 30 years of experience in tackling poverty through various means, including microfinance.  However, it was considering other approaches, such as the “ Millennium Village” approach, which would tap into a network of non-governmental organizations and communities to develop an integrated strategy.  Under that scenario, resources would be managed directly by beneficiaries.

Regarding the consistency of fund allocation and a United Nations effort to rein in zakat resources, he said the Islamic Bank had consistently allocated $4 billion annually for poverty alleviation and there was strong coordination among donors.  However, the Bank had not publicized its work, which could be why there was discussion about zakat resources.  The Bank was considering the use of private sector resources to increase the possibilities for the fund.

Asked about the manner in which the $10 billion would be spent, and for how long, he said the fund was a 10-year programme to be used for eradicating poverty and tackling the major diseases of malaria, tuberculosis and HIV/AIDS, particularly in African member countries.  Senegal, Niger, Mali and Mozambique were already benefiting from Islamic Bank programmes and the institution hoped to develop an additional regional programme to fight malaria.

Regarding existing or potential activities in the Sudan and Somalia, he said the Bank was involved in water programmes in Somalia, Djibouti, Niger, Mali and Côte d’Ivoire.  It also maintained education programmes in all member countries under which it made loans to their Governments.

On how the Bank made money through “sharia lending” he said the fund’s primary goal was not to make money, but rather to cover its administrative costs.  The Bank’s non-concessional operations provided income.

Asked about speculation that sharia-based institutions were used to transfer money to terrorist groups, he said the Islamic Bank had maintained a AAA rating from various agencies, including Moody’s, for more than four years.  Furthermore, it had a board of directors as well as a board of governors, and produced a publicly available annual report.

To a question about whether perceptions surrounding zakat resources and “impressive” poverty figures used by General Assembly President Sheikha Haya Rashed Al Khalifa earlier today would hinder General Assembly efforts, her senior adviser, Yasser El Naggar, said the President’s main aim had been to raise awareness of poverty and to change perceptions of certain issues.  Informal thematic debates were an important part of the General Assembly’s revitalization work, with the sixty-first session marking the start of the Assembly’s commitments.  A second informal debate, on gender and development, would take place in February and a third, on the dialogue among civilizations, was planned for May.

Asked how the Islamic Bank was addressing the lack of progress among North African countries in addressing women’s education and maternal mortality issues, he said education for girls was a key component of all the Bank’s education programmes.  Moreover, given its interest in mainstreaming women’s issues in all its programmes, it had developed an advisory panel comprising 12 women to ensure progress in that area.  There were noteworthy programmes in Kazakhstan and Tajikistan.

To a final question on lending conditions, he said the Islamic Development Bank did not impose “World Bank-style” conditions on its loans.  Rather, it was debating with its partners how best to use resources to develop the best possible programmes.  The poverty fund would target the least developed members, 80 per cent of which were in Africa.

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For information media • not an official record