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Building Resilience for Equitable Growth
in the Post-2015 Development Agenda
Statement of Dr Ahmed Mohamed Ali
President
Islamic Development Bank Group
Jeddah Saudi Arabia
For 11th World Islamic Economic Forum: Building Resilience for Equitable
Growth,
3-5 November 2015 Kuala Lumpur, Malaysia
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بسم هللا الرحمن الرحيم
الحمد هلل رب العالمين
والصالة والسالم على أشرف المرسلين
H.E. DATO’ SRI NAJIB TUN ABDUL
RAZAK, PRIME MINISTER,
MALAYSIA
H.E. DRAGAN COVIC, CHAIRMAN
OF THE PRESIDENCY, BOSNIA AND
HERZEGOVINA
H.E. YAQUB EYYUBOV, DEPUTY
PRIME MINISTER, REPUBLIC OF
AZERBAIJAN
H.E. SUN CHANTHOL, SPECIAL
ENVOY TO PRIME MINISTER HUN
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SEN, SENIOR MINISTER AND
MINISTER OF COMMERCE,
CAMBODIA
H.E. TUN MUSA HITAM,
CHAIRMAN, WORLD ISLAMIC
ECONOMIC FOUNDATION
مة هللا وبركاتهالسالم عليكم ورح
Excellencies, Ladies and Gentlemen,
On behalf of the Islamic Development Bank
Group, I renew my warm congratulations to the
People and Government of Malaysia and the
World Islamic Economic Foundation, for
increasingly sustaining the high quality and
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relevance of the World Islamic Economic
Forum.
The WIEF is undoubtedly one of the finest
showcases of the Ummah, an excellent
platform for partnership, exchange, and
knowledge sharing on critical development
issues. It is our duty to commend this
outstanding achievement and provide support
for further success.
In this regard, it is my pleasure to reaffirm the
Islamic Development Bank Group’s
commitment to pursue fruitful collaboration
with the Foundation and Malaysia in the
service of the Ummah and the entire world.
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In this special forum, I want to express strong
appreciation to the Government of Malaysia for
the excellent relations since the establishment of
the Islamic Development Bank. Malaysia has
been very active with its initiative of capacity
building program for the Least Developed OIC
member countries in the areas of agriculture,
education and Islamic finance to share
Malaysia’s knowledge, experience and
expertise. In fact, this has been inspirational for
IDB Group’s Reverse Linkage program,
whereby OIC Member Countries themselves
are primary, forefront, and direct agents in the
provision of specific expertise, knowledge,
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know-how, investments, success stories, and
best practices to achieve a win-win outcome.
Excellencies, Ladies and Gentleman,
The theme of the forum “Building Resilience
for Equitable Growth” eloquently reflects some
of the major challenges confronted by
developing countries, especially emerging
market economies, as the global economy is
experiencing some major transitions.
While recovery from the Financial Crisis of
2008 is still to firm up, the global economy is
facing many headwinds: oil prices instability,
exchange rate adjustments, divergence of
monetary policies and the ramifications of
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China’s slowdown on commodity prices and
global trade.
OIC member countries are facing many other
challenges as well. There are more than 60
million people displaced due to conflict and
disasters in the world today. More than 90% of
them come from OIC member countries. In
Yemen last week, not only are people affected
by war, but a category-4 cyclone landed on
them over the weekend. Countries subject to
these tragic challenges will have little chance of
achieving full potentials whilst development
gains are eroded as a result of war and disasters.
The Ummah has no excuse now but to lead in
rethinking how we assist in building resilience
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and preventing conflicts. We are pleased that
the first ever World Humanitarian Summit is
going to be held in an OIC member state Turkey
and the main preparations are led by your very
own Malaysian Dr Jemilah Mahmood. This is
the time we stand behind the opportunities and
IDB will be working closely with the United
Nations and His Royal Highness Sultan Nazrin
Shah who is the co-chairman of the high level
panel for humanitarian financing leading to the
Summit. We must apply all our knowledge on
Islamic social finance and be innovative.
Failing to do so, we will fail the youth and
children and lead us to greater risks of
radicalization. Today, we can classify more
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than 60 various drivers of conflicts, but many of
them are rooted in development deficits. OIC
countries need to place more emphasis on
building resilience to shocks and vulnerabilities
to conflicts through more effective and
inclusive governance and greater collaboration.
The complex causes of conflicts as well as
prevention and early recovery need to be
addressed with collective efforts of all OIC
community as well as international partners
active in humanitarian, peacekeeping, and
development fields.
Excellencies, Ladies and Gentleman,
As you are aware, the year 2015 has been
marked by the adoption of the Sustainable
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Development Goals (SDGs) during the UN
Summit held in New York last September
wherein the Global Leaders set a new global
agenda to end poverty by 2030 and pursue a
sustainable future.
Indeed, the sustainable development agenda
places a clear emphasis on promoting inclusive
growth, reducing inequalities and building
resilience.
There is now a growing consensus among
scholars and development practitioners that
growth cannot be socially transformational if it
fails to translate into shared prosperity. It means
that growth dividends should benefit more to
the poorest and the most vulnerable.
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My vision is for a structural approach, focusing
on the social infrastructure to promote income-
generating activities that will support access to
social services. In practical terms, as we build
schools and health centers, especially in remote
areas, we develop the rural infrastructure as well
for agriculture, pastoralism, and trading
facilities.
I would also like to insist on the importance of
financial inclusion. As a large portion of
population in our member countries lack access
to basic financial services, greater attention
should be paid to extending financial resources
to support excluded people and SMEs.
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Building greater resilience will also be
strengthened through sustained efforts towards
economic diversification, technological
upgrading and innovation, and through
fostering the growth of micro-, small- and
medium-sized enterprises.
Excellencies, Ladies and Gentleman,
The new development agenda covers the means
of implementation, highlighting finance and
partnership. Even the conservative estimates
for a meaningful realization of the SDGs start
from a trillion dollar global financing
requirement annually. Coupled with the
recurrent financial and economic crisis, this
ambitious agenda cannot be achieved by
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relying only on traditional sources of
development finance, and there is an obvious
need for fresh and innovative alternatives. In
this context, I would like to particularly mention
the opportunities provided by Islamic finance.
Islamic finance has strong potential in
promoting financial stability, financial
inclusion and shared prosperity, and
infrastructure development, all contributing to
building resilience for equitable growth.
The principles of Islamic finance can minimize
the severity and frequency of financial crises by
introducing greater discipline into the financial
system and requiring the financier to bear or
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share in the risk of the underlying economic
activity.
When it comes to promoting solidarity and
combating inequality, the implementation of
Zakat principle, complemented by the
establishment of Awqaf, have historically
played a major role in serving the social needs
of the Ummah.
I encourage the authorities in all the Muslim
communities to fully endorse and support these
institutions, the development of which can
address many shortcomings in social and
redistribution policies.
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Likewise, the partnership financing, the core
element of Islamic finance, is an important
source of funding for SMEs that can provide
opportunities for entrepreneurship, jobs
creation and income generation.
Moreover, the growing sukuk industry at the
global level gives a tangible evidence that
Islamic finance will play a major role in
development financing especially for large-
scale infrastructure.
In this regard, I would like to assure you of the
readiness of the entire IDB Group, as a leading
institution in fostering Islamic finance
development, to cooperate with all stakeholders
in developing the requisite enabling
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environment for Islamic finance, establishing
and supporting Islamic financial institutions,
developing Islamic microfinance sector, and
enhancing awareness about Islamic finance.
I believe that together with the WIEF
Foundation and all the Islamic institutions we
can further impulse the growth of Islamic
finance and enhance its contribution in
achieving the SDGs for our Member Countries
and beyond.
In this regard, I call for a stronger partnership
with governments, private sector institutions,
multilateral development banks and donor
institutions, with the view of mainstreaming
Islamic finance into the global financial system
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to improve resource mobilization and financial
inclusion. Considering their critical roles in
achieving the SDGs, IDB Group is organizing a
Side Event this afternoon with the theme
“Financial Inclusion for Achieving SDGs: The
Role of Islamic Finance” and I am very pleased
to invite you all to this event.
Excellencies, Ladies and Gentleman,
I would like to mention another important event
that marked the year 2015 which has a
significant importance for the development
agenda. In fact, the active and energetic G20
Presidency of Turkey during the year 2015
provided an excellent opportunity for all
developing countries to place their development
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challenges in the forefront of the G20 agenda
and also to reinforce dialogue, cooperation and
integration among them for greater progress and
more inclusive prosperity.
The priorities initiated by Turkey during its G20
Presidency, namely, the three I’s: Inclusiveness,
Investment and Implementation are pertinent
and important for developing countries. We all
commend Turkey, the Chair of the G20, for
giving special prominence to the private sector
in the G20 process and initiating within the B20
various working groups and organizing a
number of consultation meetings. In this
context, the B20 Regional Consultation
Forums, held in 8 major cities including Jeddah
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and Baku discussed the most pressing
economic issues and policy priorities for
businesses in these regions.
The newly created global platform of the World
SMEs Forum is timely and most welcome. I
urge our standard setters and policy makers to
engage fully with this forum for addressing
challenges facing the SMEs sector in our
Member Countries, and to develop innovative
tools and products of Islamic finance for SMEs.
In this respect, I suggest the immediate
establishment of a working group, among OIC
institutions and specialized business forums like
WIEF, to study the ways and means of
leveraging support by Islamic finance to SMES,
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through research and exchange of expertise.
The IDB Group is more than committed to
providing solutions in these areas and in
particular the areas of regulations, including the
development of the requisite legal, regulatory,
supervisory and Shariah framework.
The initiatives introduced by Turkey under its
G20 Presidency, are extremely important for the
developing countries as a whole and
particularly the OIC Member Countries. I am
confident that Turkey, Indonesia and Saudi
Arabia, the three OIC Members Countries-
members of G20, will pursue these initiatives
and particularly the role of Islamic finance in
ensuring more robust and inclusive growth.
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Excellencies, Ladies and Gentleman,
In conclusion, and in view of the tragic situation
that a number of OIC Members Countries are
living today, I would like to suggest to the
WIEF to establish a platform for Experts to
provide innovative ideas and to advice OIC
institutions on ways and means to play a more
active role in addressing the enormous
challenges facing the Ummah today.
Further, the 2030 Agenda for Sustainable
Development stimulates action for the 5 Ps,
People, Planet, Prosperity, Peace and
Partnership, which can inspire and guide the
work of this platform.
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Excellencies, Ladies and Gentleman,
Once again, I thank the Prime Minister, the
people of Malaysia, and the World Islamic
Economic Foundation for inviting IDB Group
to this very important Forum. I wish the Forum
successful deliberations in its entire
dimensions: knowledge, business and
partnership.
I thank you all for your attention.
والسالم عليكم ورحمة هللا وبركاته