Islamic Development Bank

Islamic Development Bank
Abbreviation IDB
Motto Together We Build A Better Future[1]
Formation 1975 (1975)
Type Development bank
Location
Membership
56 countries
Key people
 Ahmad Mohamed Ali Al-Madani, President
Employees
932
Website Official website

The Islamic Development Bank (IDB) (Arabic: البنك الإسلامي للتنمية ) is a multilateral development financing institution located in Jeddah, Saudi Arabia. It was founded in 1973 by the Finance Ministers at the first Organisation of the Islamic Conference (now called the Organisation of Islamic Cooperation) with the support of the king of Saudi Arabia at the time (Faisal), and began its activities on 20 October 1975.[2] There are 56 shareholding member states.[3]

On the 22 May 2013, IDB tripled its authorized capital to $150 billion to better serve Muslims in member and non-member countries.[4] The Bank has received credit ratings of AAA from Standard & Poor's,[5] Moody's,[6] and Fitch.[7] Saudi Arabia holds about one quarter of the bank's paid up capital[8] The IDB is an observer at the United Nations General Assembly.

Membership

The present membership of the Bank consists of 56 countries. The basic condition for membership is that the prospective member country should be a member of the Organisation of Islamic Cooperation (OIC), pay its contribution to the capital of the Bank and be willing to accept such terms and conditions as may be decided upon by the IDB Board of Governors.

Ranked on the basis of subscribed capital (as of October 2015),[8] major shareholders include:

SN Country% of Total
1  Saudi Arabia 23.52%
2  Libya 9.43%
3  Iran 8.25%
4  Nigeria 7.66%
5  United Arab Emirates 7.51%
6  Qatar 7.18%
7  Egypt 7.08%
8  Kuwait 6.92%
9  Turkey 6.45%
10  Algeria 2.54%

IDB Group

IDB has evolved into a group of five Entities, consisting of Islamic Development Bank (IDB), Islamic Research & Training Institute (IRTI), Islamic Corporation for Development of the Private Sector (ICD), Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) and International Islamic Trade Finance Corporation (ITFC).

From its humble beginnings in 1974, the Bank has evolved into a group of six entities consisting of Islamic Development Bank (ISDB or the Bank), Islamic Research & Training Institute (IRTI), Islamic Corporation for Development of the Private Sector (ICD), Islamic Corporation for Insurance of Investment and Export Credit (ICIEC), International Islamic Trade Finance Corporation (ITFC) and Islamic Solidarity Fund for Development (ISFD).

ISDB, ICD, ITFC & ICIEC are all individual multilateral financial institutions with their own Articles of Incorporation, Boards of Executive Directors and Management. Details of the shareholding, external auditors, key officials, etc.

ISDB affiliates and Special Funds have separate and distinct assets and liabilities and the Bank does not control any of the affiliates and Special Funds. A brief overview of each of the other ISDB Group members is as follows:

1.1 ICIEC

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) was established in 1994 as a multilateral financial institutions operating under Shariah principles.[9] ICIEC’s vision is to be recognized as the preferred enabler of trade and investment for sustainable Economic development in its Member Countries with a mission to facilitate trade and investment between member countries and the world through Sharia compliant risk mitigation tools.[10]

1.2 IRTI

The Islamic Research & Training Institute (IRTI) was established in 1979 as a dedicated centre for specialized research and training in advancement of Islamic finance. IRTI vision is to be the global knowledge centre for Islamic economics and Finance by 2020 and has set a mission to inspire and deliver cutting edge research, capacity building, advisory and information services in the area of Islamic economics and finance".[11]

1.3 ITFC

The International Islamic Trade Finance Corporation (ITFC) was created as a multilateral development financial institutions to provide Shari’ah-compliant Trade finance and encourage intra-trade among OIC member countries.[12] ITFC helps businesses in member countries gain better access to Trade finance and provides them with the necessary trade-related capacity building tools in order to help them compete successfully in the global market.[13]

1.4. ICD

The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institutions established in 1999 to support the Economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to the governments and private companies and encouraging cross border investments.[14] ICD has an authorized capital of $4 billion. ICD fosters sustainable economic growth in its 52 member countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to business and governments.[15]

1.5. ISFD

The Islamic Solidarity Fund for Development (ISFD) is dedicated to reducing poverty in its member countries by promoting pro-poor growth, emphasizing human development, especially improvements in health care and education, and providing financial support to enhance the productive capacity and sustainable means of income for the poor, including financing employment opportunities, providing market outlets especially for the rural poor and improving basic rural and pre-urban infrastructure.[16]

Projects and programs

Completed

Ongoing

  1. Scholarship Programme for Muslim Communities in Non-Member Countries
  2. M.Sc Scholarship Programme in Science and Technology for IDB Least Developed Member Countries
  3. Merit Scholarship Programme for High Technology[20]

Criticism

IDB President Ahmad Mohamed Ali has stated there was no scope of providing terrorist financing through the Islamic banks. It is a wrong conception that more scopes are available to finance terrorism through the Islamic banks.[21][22] IDB is united with the international community in seeking to prevent abuses of the financial system by money launderers and terrorists. And IDB’s technical assistance program helps member countries strengthen their legal system and institutional framework for fighting money laundering and terrorist financing.[23] Besides these facts, there are some critics against it.

The Islamic Development Bank is known to have funded several projects related to the U.S.-terrorist designated Hamas and the Muslim Brotherhood.[24]

In August 1999 the Islamic Development Bank approved a $250,000 transfer issued by the Saudi government as a contribution to “the purchase of land in Washington DC to be the headquarters for an education and research center under the aegis of the Council for American Islamic Relations (CAIR).”[24][25] CAIR is a U.S.-based Muslim advocacy organization with strong ties to Hamas which have been confirmed by several investigations.[26]

An article by Rachel Ehrenfeld and Alyssa A. Lappen reported that in 2001 the Islamic Development Bank transferred $538 million raised by Saudi and Gulf royal telethons to support families of Palestinian suicide bombers and the cause of the Palestinian intifada.[27] On August 1, 2001 Dr Ahmad Muhammad Ali, a Saudi academic and president of the Islamic Development Bank, reportedly said during an interview with Asharq al-Awsat: “There was no delay in paying financial assistance to the families of Palestinian martyrs...We have started paying them soon after receiving the money.”[28][29]

Dr Ali had previously declared that IDB was responsible for the smooth functioning of al-Quds Intifada Fund and al-Aqsa Fund, both established during an Arab summit in Cairo in October 2000. According to the final communiqué of the summit, “Al-Quds Intifadah Fund will have a capital of 200 million dollars to be allocated for disbursement to the families of Palestinian martyrs fallen in the Intifadah.”[27][30]

Furthermore, Ehrenfeld and Lappen mentioned documented bank records discovered in the West Bank and Gaza proving that the IDB has channeled UN funds to Hamas.[27] Nevertheless, the bank was granted observer status by the UN in 2007 amidst all-round criticism.[27][28]

In 2008 IDB funded the project of a rehabilitation center and vocational training center by ARRAID, a Muslim Brotherhood organization in Ukraine also known as Ukrainian Association of Social Organizations.[31] ARRAID is a member of the Federation of Islamic Organizations in Europe (FIOE), an umbrella group for Muslim Brotherhood organizations in Europe.[31] Based on an ARRAID fundraising brochure, the aim of the organization span cultural, educational and financial support to Ukrainian Muslims.[31][32] Through a progressive “Islamic proselytism (da’wa) in the country,” ARRAID intended to become “an important breach (thughra) in confronting Christian missionary attacks and Jewish expansion, so assist and help it to be able to follow the way it began.”[31][32]

Moreover, the Islamic Development Bank has financed projects by the Islamic Society of North America (ISNA), the largest Muslim organization in North America which has been accused of ties with extremist and terrorist organizations.[33] INSA has systematically denied that it was “subject to the control of any other domestic or international organizations including the Muslim Brotherhood;”[34] yet documents released in the Holy Land Foundation terrorism financing case ultimately proved INSA’s affiliation with the Muslim Brotherhood in the U.S.[34]

Recently, the bank’s name has been associated with the Boston Marathon bombings in 2013. Dzhokar Tsarnaev, one of the two Kyrgizstani-American citizen who was convicted of planting bombs at the marathon, used to pray at the Islamic Society of Boston (ISB) mosque in Cambridge, MA. The Islamic Development Bank is one of the major financial contributors to IBS. Allegedly, the Islamic Society of Boston received a $1,000,000 donation from the Islamic Development Bank.

Beyond the IDB’s ties to the Muslim Brotherhood and Hamas, a 1991 report by the U.S. Library of Congress on Sudan claimed that the IDB contributed to the political and financial transformation of Sudan into a radical Islamic state in 1983.[27] In fact, the Islamic Development Bank had supported the Sudanese Faisal Islamic Bank, which was established in 1977 by Saudi prince Muhammad ibn Faisal Al Saud and managed by the National Islamic Front, an Islamist political organization that included the Sudanese branch of the Muslim Brotherhood.[27] According to that report, the establishment of Faisal Islamic Bank induced other Sudanese political groups to form their own Islamic banks,[27] to the extent that in the early 1980s the Islamic banks in Sudan had acquired 20% of the country’s deposits, thereby providing the financial basis for the country’s Islamization and “promoting the Islamic governmental policies to date.”[27][35]

See also

References

  1. ↑ "UN Secretary General Praises IDB Group's Role in Supporting Member Countries’ Plans and Programs". Retrieved 4 February 2016.
  2. ↑ Epstein, Matthew (September 2003). "Saudi Support for Islamic Extremism in the United States" (PDF). Islam Daily. Retrieved 22 April 2012.
  3. ↑ Taylor & Francis Group and Dean, 2003, p. 1328.
  4. ↑ Islamic Development Bank triples authorised capital| reuters.com|2013/05/22
  5. ↑ "Capital Markets".
  6. ↑ Moody's rating
  7. ↑ Fitch rating
  8. 1 2 "IDB Group in Brief". Retrieved 21 February 2016.
  9. ↑ "ISDB Group - ICIEC". ICIEC. Retrieved 26 February 2016.
  10. ↑ "Moody’s affirms ICIEC’s Aa3 rating". Saudi Gazette. Retrieved 26 February 2016.
  11. ↑ "IRTI to launch free online Islamic finance courses". Mehr News Agency. Retrieved 26 February 2016.
  12. ↑ "International Islamic Trade Finance Corporation (ITFC)". ITFC. Retrieved 26 February 2016.
  13. ↑ "The International Islamic Trade Finance Corporation signs a country host agreement on the establishment of a branch in Dubai, United Arab Emirates". Zawya. Retrieved 26 February 2016.
  14. ↑ "The Islamic Corporation for the Development of the Private Sector ("ICD")". ICD. Retrieved 26 February 2016.
  15. ↑ "Islamic Corporation for the Development of the Private Sector (ICD)". IDFC. Retrieved 26 February 2016.
  16. ↑ "IDB Group appoints Al-Wohaib as ISFD chief". Kuwait News Agency. Retrieved 26 February 2016.
  17. ↑ The Gao Bridge in Mali
  18. ↑ "Kanarch Canal Transforms Agriculture" (PDF). ISDB. June 2011. Retrieved 2 April 2014.
  19. ↑ Modernising road planning and designing in Yemen
  20. ↑ "Islamic Development Bank". Retrieved 27 January 2016.
  21. ↑ NewAge. "No scope of providing Terrorist". The Outspoken Daily. Retrieved 7 February 2016.
  22. ↑ DhakaMirror. "Islamic banks not involved in terror financing". Dhaka Mirror. Retrieved 12 February 2016.
  23. ↑ Worldbank.org. "Combating Financial Abuse" (PDF). Siteresources Worldbank. Retrieved 7 February 2016.
  24. 1 2 gmbwatch. "Islamic Development Bank Launches Global Media Campaign". The Global Muslim Brotherhood Daily Watch. Retrieved 27 January 2016.
  25. ↑ "IDB approves new projects worldwide". 15 August 1999. Archived from the original on 26 October 2003.
  26. ↑ Daniel Pipes and Sharon Chadha. "CAIR Founded by "Islamic Terrorists"?". Daniel Pipes. Retrieved 27 January 2016.
  27. 1 2 3 4 5 6 7 8 "Jihad Economics and Islamic Banking". Retrieved 27 January 2016.
  28. 1 2 "Terror Bank Gets Observer Status at U.N.". TheHill. Retrieved 27 January 2016.
  29. ↑ Anne Bayefsky (26 March 2007). "National Review Online". National Review Online. Retrieved 27 January 2016.
  30. ↑ Dave Clark. "Banking on terrorism in Australia". Retrieved 27 January 2016.
  31. 1 2 3 4 GlobalMB. "Ukrainian Muslim Brotherhood Organization Receives Funding From Saudi Bank". The Global Muslim Brotherhood Daily Watch. Retrieved 27 January 2016.
  32. 1 2 http://crimeatau.org.ua/project/islam/itriu.html
  33. ↑ "The Islamic Society of North America :: The Investigative Project on Terrorism". The Investigative Project on Terrorism. Retrieved 27 January 2016.
  34. 1 2 GlobalMB. "More Disingenuous Statements From ISNA". The Global Muslim Brotherhood Daily Watch. Retrieved 27 January 2016.
  35. ↑ Helen Chapin Metz, ed. Finance, in Sudan: A Country Study (Washington: GPO 1991).

External links

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