IDB Can Help Spur Economies through Infrastructure Investment
Bernama – 20 March 2006

PUTRAJAYA - The Islamic Development Bank (IDB) can do a lot to help Muslims by investing in the infrastructure in Muslim countries, especially the poorer ones, and help spur economic development, says former Prime Minister Datuk Seri Dr Mahathir Mohamad.

He said the Malaysian experience had shown that when a road or highway was built, it would stimulate the local economy.

"You can see along the North-South Expressway the number of towns and industrial estates that have come up," he said, adding that the IDB could also help eradicate poverty and strengthen the incomes of the people in areas by investing in infrastructure.

Dr Mahathir made these comments in an interview with Bernama ahead of the launch the 1440 Hijrah Vision Report by Prime Minister Datuk Seri Abdullah Ahmad Badawi in Kuala Lumpur on Thursday.

Dr Mahathir headed a commission under the auspices of the IDB to produce the report aimed at providing the direction how the IDB could become a more dynamic entity to help Muslims around the world and improve the image of Islam.

One of the recommendations of the commission was for the IDB to spearhead an "education for all" movement.

"I must admit that I am quite influenced by our experience in Malaysia where we have found that money spent on education is always wise because it will give us (good) returns. In Malaysia we spend huge sums of money on education," he said.

He said the commission found that illiteracy was very high in some Muslim countries and this reduced their capability to maximise their potential.

"Something has to be done," he said, adding that this could be done by creating more educational institutions in countries which needed them most or sending their people to have access to education.

As for revitalising the IDB, the bank had done well in its banking operations, said Dr Mahathir, who is now honorary president of the Perdana Leadership Foundation, a foundation dedicated to Malaysian leadership and national development. For instance, he said the IDB had been accorded a AAA long-term rating by Standard & Poors and had spawned the establishment of more than 30 Syariah-based financial institutions around the world.

But Dr Mahathir said the development part of its operations was not getting the right amount of attention because development usually entailed running a lot of risks.

He said how these risks could be overcome was very important and the commission members did have some ideas how they could be effected without affecting the performance of the bank.

Dr Mahathir said people who ran banks were the same everywhere in that they would not lend to those who could not repay.

"(But) it is the people who cannot repay who needs the support of the bank most. So we will have to have to find a way to overcome that, to ensure that the bank (IDB) doesn't lose money but it is able to support those who cannot repay so that so that they will develop and acquire wealth, and because of that they will have a sustained economic development to enable them to repay the bank (some day).

Asked whether the IDB should be more lenient when dealing with borrowers, Dr Mahathir said there may be a need for that "but I am not thinking of charity."

"I am thinking (more) of investment. It may not be investment by the IDB, it may be investment by an entity, private or government, which has access to IDB money. It is these people who will carry out the actual work of development, the kind of development that can help overcome poverty (in the least developed countries)," he said.

Asked whether the richer Muslim countries could help to uplift the economies of poorer Muslim countries by employing their people, Dr Mahathir said this was already being done in the Gulf states.

"A lot of Muslims and non-Muslims have gone to the Gulf states to provide the necessary labour, both skilled and non- skilled. By doing that, you create a remittance economy in their countries. What they remit back to the countries would help in the development of their own countries although they are working outside (their countries), he said.
Source: Bernama | www.bernama.com