JEDDAH, July 7 (Reuters): A new infrastructure fund from the Islamic Development Bank (IDB) aims to help Gulf-based companies expand in Asia and Africa, developing stronger economic ties among these regions.
Jeddah-based IDB is keen to grow trade among its 56 member countries and fill a void left by other multilateral and private-sector financial institutions that have been slow to support such regional strategies.
The fund could jump-start sluggish levels of trade across these markets, helping the IDB in its efforts to reach a target of 20 per cent of intra-member trade by 2015 from about 17 per cent now.
But more needs to be done to reach that target: Exports among IDB-member countries reached $343.7 billion as of 2011, representing only 15.3 per cent of total exports and a drop from the 17.3 per cent recorded in 2009, the latest IDB data showed.
Three-quarters of those exports came from only 10 member countries, such as Indonesia, the United Arab Emirates and Turkey. Nigeria, Egypt and Bangladesh ranked far lower, despite the significant opportunities in those markets.
Part of the problem is limited support from financial institutions in these regions, many lacking a regional presence of their own, a gap which the IDB fund could help fill.
IDB, which promotes economic development in Muslim countries and communities, has ramped up its development efforts after it more than tripled its authorised capital in 2012.
Both Gulf and Asian-based companies could build substantial market share in these new markets, said Khan, adding that the fund was looking at opportunities in Nigeria, Egypt, Pakistan and Bangladesh.
The fund has $750 million in commitments from shareholders Saudi Arabia, Bahrain and Brunei, with plans to reach $2 billion in size by next year, surpassing the original $730 million fund launched in 2001.
IDB to help Gulf cos to expand in Asia, Africa
FE Team | Published: July 08, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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