Countries like Bangladesh should ensure an investment-friendly environment for the private sector that plays a big role in meeting the development financing needs, Islamic Development Bank (IsDB) President Bandar M. H. Hajjar has said.
"If our member countries think that they can depend only on multilateral development banks (MDBs) for their development finance, they are wrong", said the IsDB President at a press briefing in the capital on Sunday. He is now in Dhaka on a three-day visit.
"For example, our member countries would require, in total, around US$ 1.0 trillion each year to implement the Sustainable Development Goals (SDGs)", Hajjar noted.
"At the same time, they need around US$ 700 billion each year for implementing just the basic infrastructure".
"But the total amount of financing available with the MDBs is only around US$ 147 billion", he noted.
"So, the financing gap is huge. And we need other sources of financing and that source is the private sector".
In this context, the IsDB president called for creating congenial environment for private sector investment in the country.
"The only way to attract more investment from the private sector is to create an investment-friendly regulatory environment", he said.
"We are currently adopting a new model to encourage the private sector to get into the development process".
"IsDB is here to help the member countries transform into market-oriented economies", he added.
During his visit to Dhaka, Mr. Hajjar also formally inaugurated the IsDB regional hub in the capital. This is the first of the 11 regional hubs the IsDB is planning to open across its member countries in the coming years.
"Currently, we are looking to decentralise our activity. And the geographical location of Dhaka makes it an ideal place as a regional hub", Hajjar said.
"At the same time, we are intending to create a development network including various partners and stakeholders like private sector, NGOs, civil societies, universities, research centres and we think it is an ideal place to create that development network", he said.
"We are trying to create an integrated network for our bank and for that, we have to be on the ground", he added.
Speaking during the press briefing, Finance Minister AMA Muhith said that establishment of the IsDB regional hub in Dhaka signals that the prevailing environment in the country is congenial for research and innovation.
Chief Executive Officer of Islamic Trade Finance Corporation (ITFC) Hani Salem Sonbol, who was also present during the briefing, said that his entity was looking to diversify its portfolio in Bangladesh.
Bangladesh currently uses the ITFC loan for import of oil.
However, when asked whether ITFC is looking to diversify its loan portfolio in the country, Sonbol said, "We are considering including LNG (liquefied natural gas) in our portfolio in Bangladesh and we are trying to finalise this deal with the government very soon".
"We are also working to provide financing to enhance the capacity of SMEs (small and medium enterprises) and channel more financing to them", he added.
Headquartered in Jeddah, the IsDB currently consists of 57 member countries.
Bangladesh is the biggest recipient of IsDB financing among its member countries, receiving more than US$ 21.9 billion since 1974 including trade insurance and trade financing.
© 2024 - All Rights with The Financial Express
