2024-05-01 16:30:48
Islamic finance is an effective mechanism to meet the growing demand for infrastructure projects.
As Day.Az reports with reference to Trend, this was stated by the Chairman of the Islamic Development Bank (IDB) group, Muhammad Suleiman Al-Jasser, speaking at a panel discussion on the topic of using Islamic finance for the development of sustainable infrastructure” within the framework of the annual meetings of the IDB in Riyadh .
He noted that COVID-19 has exposed vulnerabilities in infrastructure, draining government resources and reversing development progress.
“A third of least developed countries are now worse off than before the pandemic. Without immediate action, their development prospects could deteriorate further. Least developed countries have enormous economic potential waiting to be unlocked. Increasing investment in social and physical infrastructure is key to reducing poverty, improving health and education, and creating jobs, it also increases resilience to future shocks such as pandemics and climate change,” Al-Jasser said.
He believes the world needs long-term solutions and sustainable infrastructure projects are the answer.
“However, financing these projects requires a paradigm shift. The infrastructure financing gap is estimated to be US$15 trillion by 2040. Traditional public financing mechanisms are unable to meet the growing demand for infrastructure projects. Addressing these challenges and mobilizing sufficient financing for long-term investments requires fresh approach.
This is where Islamic finance shines as a ray of light. Its asset-based and risk-sharing principles are ideally suited to the needs of least developed countries for long-term infrastructure projects,” he explained.
Moreover, Al-Jasser said that Islamic finance, with its emphasis on environmental responsibility, is ideally suited to support these endeavors.
“Over the past five decades, the Islamic Development Bank has championed Islamic finance. Our strategy aims to build strong partnerships, develop financial markets and empower the private sector. Sound governance is critical to ensuring effective risk mitigation in this system,” he added .
It should be noted that from April 27 to 30, the annual meetings and golden jubilee of the Islamic Development Bank Group (IDB) are being held in Riyadh (Saudi Arabia) under the royal patronage of the Custodian of the Two Holy Mosques, King of Saudi Arabia Salman bin Abdulaziz Al Saud.
The theme for the 2024 meetings is “Treasuring the Past, Charting the Future: Originality, Solidarity and Prosperity.” These meetings mark 50 years of the Bank’s activities to promote socio-economic development in member countries.
As part of the event, it is planned to hold a round table on the topic of COP29 with the participation of representatives of the Azerbaijani government. The Group’s annual meetings and the golden jubilee of the IDB, which is the leading multilateral development bank for South-South cooperation, are expected to attract international and regional attention. The annual meetings will include a series of side events with the participation of senior representatives from government, international and regional organizations, the private sector, academia and civil society.
The events will be attended by ministers of economy, planning and finance from 57 IDB member countries, as well as representatives of international and regional financial institutions, Islamic banks, private sector companies, national and international development financial institutions, international and regional organizations, NGOs, chambers of commerce and industry and business advice.
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