Downloadable Economics” (Annex Table 4.1)
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CORPORATE PROFILE OF THE ISLAMIC DEVELOPMENT BANK Establishment Capital The Islamic Development Bank (IDB) is an international Pursuant to the decision of the Board of Governors financial institution established in pursuance of the in their 31st Annual Meeting held in Kuwait in Jumad Declaration of Intent issued by the Conference of Awwal 1427H (May 2006), the Authorized Capital Finance Ministers of Muslim Countries held in Jeddah of the IDB was increased from ID15 billion to ID30 in Dhul Qadah 1393H (December 1973). The Inaugural billion. The Issued Capital of the IDB was increased Meeting of the Board of Governors took place in Rajab from ID8.1 billion to ID15 billion. Out of this, the 1395H (July 1975) and the IDB formally commenced Subscribed Capital was increased from ID8 billion to operations on 15 Shawwal 1395H (20 October 1975). ID13.2 billion. The Paid-up Capital of the IDB as of the end-1427H was ID2.81 billion. Purpose Head Office and Regional Offices The purpose of the IDB is to foster the economic development and social progress of member countries The IDB’s principal office is in Jeddah, the Kingdom and Muslim communities in non-member countries of Saudi Arabia. Three regional offices were opened in individually as well as jointly in accordance with the Rabat, Morocco; Kuala Lumpur, Malaysia; and Almaty, principles of Shari’ah (Islamic Law). Kazakhstan. The IDB is in the process of opening its fourth regional office in Dakar, Senegal. Functions Financial Year The functions of the IDB are to provide various forms of development assistance for poverty alleviation through The IDB’s financial year is the lunar Hijra Year (H). human development, forging economic cooperation through promotion of trade and investment among Accounting Unit member countries, and enhancing the role of Islamic finance in the social and economic development of The accounting unit of the IDB is the Islamic Dinar member countries. The IDB is also required to establish (ID) which is equivalent to one SDR - Special Drawing and operate special funds for specific purposes including Right of the International Monetary Fund. a fund for assistance to Muslim communities in non- member countries, in addition to setting up trust funds. Language The IDB is authorized to mobilize financial resources The official language of the IDB is Arabic, but through Shari’ah-compliant modes. It is also charged English and French are additionally used as working with the responsibility of providing technical assistance languages. to member countries, and extending training facilities for personnel engaged in development activities in member countries. Membership The present membership of the IDB consists of 56 countries. The basic condition for membership is that the prospective member country should be a member of the Organization of the Islamic Conference, pay its contribution to the capital of the IDB and be willing to accept such terms and conditions as may be decided upon by the IDB Board of Governors. The IDB Headquarters in Jeddah, the Kingdom of Saudi Arabia In the Name of Allah, 19 Rabi Awwal 1428H the Beneficent, the Merciful 7 April 2007 H.E. The Chairman, Board of Governors of the Islamic Development Bank Dear Mr. Chairman, Assalamu Alaikum Waramatullah Wabarakatuh In accordance with Articles 32(i), 32(iii) and 41(1) of the Articles of Agreement establishing the Islamic Development Bank and Section (11) of the By-laws, I have the honour to submit for the kind attention of the esteemed Board of Governors, on behalf of the Board of Executive Directors, the Annual Report on the operations and activities of the Bank in 1427H (2006-2007). The Annual Report also includes the audited financial statements of the Bank as well as those of the operations of the Waqf Fund, the Export Financing Scheme and the Islamic Banks Portfolio for Investment and Development, as prescribed in Section (13) of the By-laws. Please accept, Mr. Chairman, the assurances of my highest consideration. Dr. Ahmad Mohamed Ali President, Islamic Development Bank and Chairman, Board of Executive Directors IDB ANNUAL REPORT 1427H IDB BOARD OF EXECUTIVE DIRECTORS Hon. Ibrahim Mohamed Al-Mofleh H.E. Dr. Ahmad Mohamed Ali Hon. Agus Muhammad President, IDB and Chairman Board of Executive Directors Hon. Arslan Meredovich Yazyyev Hon. Dr. Tahmaseb Mazaheri Hon. Jamal Nasser Rashid Lootah Hon. Zeinhom Zahran Hon. Dr. Selim Cafer Karatas Hon. Somone Mibrathu Hon. Aissa Abdellaoui Hon. Faisal Abdul Aziz Al-Zamil Hon. Md. Ismail Zabihullah Hon. Mohammad Azzaroog Rajab Hon. Yakoubou Mahaman Sani Hon. Issufo Sanha 3 IDB ANNUAL REPORT 1427H CONTENTS 1427H in Review: Board of Executive Directors’ Report ...................................................................... 9 1 ECONOMIC PERFORMANCE AND MAJOR DEVELOPMENTS ISSUES AFFECTING MEMBER COUNTRIES I. MACROECONOMIC PERFORMANCE .................................................................................. 13 II. INTRA-TRADE PERFORMANCE ............................................................................................ 18 III. FOREIGN DIRECT INVESTMENT TO MEMBER COUNTRIES ....................................... 20 IV. MAJOR ISSUES AND DEVELOPMENTS AFFECTING ECONOMIC PROSPECTS OF MEMBER COUNTRIES ............................................................................... 23 2 FOSTERING ECONOMIC DEVELOPMENT I. REVIEW OF OPERATIONS, POLICIES AND INITIATIVES ............................................... 29 II. DEVELOPMENT ASSISTANCE BY SECTOR AND REGION .............................................. 30 III. DEVELOPMENT ASSISTANCE TO THE LEAST DEVELOPED MEMBER COUNTRIES .............................................................................................................. 38 IV. PROMOTING PRIVATE SECTOR DEVELOPMENT AND PUBLIC-PRIVATE PARTNERSHIPS ......................................................................................... 40 V. LEVERAGING DEVELOPMENT PARTNERSHIPS .............................................................. 42 VI. ASSISTANCE FOR GLOBAL OUTREACH ............................................................................. 43 VII. MANAGING FOR DEVELOPMENT EFFECTIVENESS ...................................................... 43 3 FORGING TRADE AND ECONOMIC COOPERATION I. ENHANCING TRADE FINANCING ......................................................................................... 57 II. MAINTAINING CAPACITY BUILDING ASSISTANCE FOR TRADE ................................ 61 III. RECENT INITIATIVES TO PROMOTE TRADE INTEGRATION ...................................... 64 IV. COOPERATION WITH THE ORGANIZATION OF THE ISLAMIC CONFERENCE ..... 66 V. BROADENING PARTNERSHIPS FOR DEVELOPMENT .................................................... 71 VI. SUPPORTING THEMATIC PROGRAMMES FOR REGIONAL COOPERATION .......... 71 IDB ANNUAL REPORT 1427H 4 ENHANCING THE ROLE OF ISLAMIC FINANCE AND INVESTING IN HUMAN CAPITAL I. OVERVIEW OF THE DEVELOPMENTAL ISSUES IN THE ISLAMIC FINANCIAL INDUSTRY AND THE ROLE OF IDB GROUP ........................................................................ 73 II. MOBILIZING RESOURCES AND UTILIZING ISLAMIC FINANCE ................................ 7 III. PROMOTING GROWTH AND STABILITY OF ISLAMIC FINANCIAL INDUSTRY ...... 77 IV. KNOWLEDGE BUILDING THROUGH ISLAMIC RESEARCH AND TRAINING INSTITUTE (IRTI) ....................................................................................................................... 78 V. LEVERAGING SCIENCE AND TECHNOLOGY FOR THE DEVELOPMENT OF HUMAN CAPITAL ....................................................................................................................... 82 VI. CAPACITY BUILDING ASSISTANCE ...................................................................................... 85 5 ACHIEVING INSTITUTIONAL EFFECTIVENESS I. HISTORIC ANNUAL MEETING OF THE BOARD OF GOVERNORS .............................. 91 II. ACTIVITIES OF THE BOARD OF EXECUTIVE DIRECTORS .......................................... 94 III. ORGANIZATIONAL DEVELOPMENT .................................................................................... 96 IV. IT ENHANCEMENTS .................................................................................................................. 97 V. STAFF DEVELOPMENT ............................................................................................................ 98 VI. LIBRARY ....................................................................................................................................... 98 6 FINANCIAL RESULTS I. OPERATIONS OUTCOME ......................................................................................................... 101 II. FINANCIAL RESULTS ................................................................................................................ 101 III. FUNDING THE OPERATIONS .................................................................................................. 104 IV. MANAGEMENT OF LIQUID FUNDS ....................................................................................... 105 V. WAQF FUND ................................................................................................................................. 106 VI. RISK MANAGEMENT ................................................................................................................ 107 FINANCIAL STATEMENTS .................................................................................................................. 111 APPENDICES ..........................................................................................................................................