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Jakarta Post

IDB eyes establishment of Islamic Infrastructure Bank in 2016

  • Ayomi Amindoni
    Ayomi Amindoni

    The Jakarta Post

Jakarta   /   Fri, May 20, 2016   /  01:45 pm
IDB eyes establishment of Islamic Infrastructure Bank in 2016 Bandar bin Mohammed Bin Hamza Asaad Al-Hajjar (left) talks with E. Ahamed, India's former minister of state for external affairs, in Jeddah, Saudi Arabia. The Islamic Development Bank (IDB) has elected Bandar as its new president, following the retirement of Ahmad Mohamed Ali from the position. (Courtesy of Twitter/-)

The Islamic Development Bank (IDB) Group is eyeing establishing the Islamic Infrastructure Bank this year, which would be led by Indonesia and Turkey as two emerging markets with large Muslim populations.

Indonesia, currently competing with Turkey to host the bank, plans to spend US$300 million on equity participation in the project. However, Turkey has committed to surpass Indonesia’s capital in a bid to bring the new bank’s headquarters to Ankara.

"Hopefully it can be realized this year. Indonesia and Turkey will lead this bank," IDB board of governors chairman Bambang Brodjonegoro said after a press conference for the IDB Group's 41st annual meeting in Jakarta on Thursday.

Last April, Bambang held a tripartite meeting with IDB president Ahmad Mohamad Ali and the deputy prime minister of Turkey, Ali Babacan, on the bank's structure and business scheme. They agreed to appoint senior officials to formulate a more detailed governance structure over the next six months.

Earlier, Vice President Jusuf Kalla expressed his support for the Islamic Infrastructure Bank. He stated that its establishment was important to realize strategic infrastructure programs for the 57 members of the IDB Group.

"Indonesia as the largest Muslim-majority country has great expectations for this institution. With experience and existing cooperation with other countries, we hope the establishment of the bank will be realized," he said.

Kalla added that during the recent conference of the Organization of Islamic Cooperation (OIC), he personally spoke to Turkish President Recep Tayyip Erdogan regarding cooperation between the countries in the establishment of the bank.

"Whether in Indonesia or in Turkey, to serve IDB member countries in Asia and Africa," he added.

New president

At the same occasion, the IDB elected Bandar bin Mohammed bin Hamza Asaad Al Hajjar as its new president, following the retirement of Ahmad Mohamed Ali. Bandar will hold the position for a five-year term.

"Ali was reelected as IDB president here in Jakarta in 1995. And now in 2016, the second time for the IDB to hold an annual meeting in Jakarta, Ali decided to retire and leave his office at the IDB," Bambang said.

Bandar is a Saudi economist who served the Gulf country as minister for haj. He was removed from his post in 2015 over a haj stampede incident that claimed the lives of thousands of pilgrims.

Meanwhile, Ali, who has introduced a number of innovative schemes and modes of financing, hoped his successor would take the bank to a higher level. (ags)

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