Following the approval in March 2020 by the Board of Executive Directors of the Islamic Development Bank (IsDB), the multilateral development bank (MDB) of the 57 OIC countries, of an US$2.3 billion Group Strategic Preparedness & Response Programme to help combat the global threat caused by the novel Coronavirus (COVID-19) pandemic, the Bank has lost no time in allocating financing to member countries.
The IsDB has made a contribution of US$1,520 million to the Programme; the Islamic Solidarity Fund for Development (ISFD) US$50 million; the International Islamic Trade Finance Corporation (ITFC), the Group’s trade fund, US$300 million; the Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Group, US$250 million; the King Abdullah bin Abdulaziz Fund for Charitable Action (KAAP) US$8.5 million; the Science, Technology & Innovation Transform Fund US$1 million; in addition to US$150 million from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the IsDB Group’s export credit agency.
The first three weeks of April was a very busy time for IsDB Group President Dr Bandar Hajjar, who conducted back-to-back virtual meetings with officials of individual member countries, given the lock-down and social distancing requirements imposed by most countries in trying to contain the spread of the virus. The meetings aimed at assessing the immediate needs and challenges posed by COVID-19 especially in health and economic sectors, and the level of emergency financing packages disbursed. This is by far the single largest round of aid financing disbursed by the MDB.
In four rounds of virtual meetings, the IsDB allocated US$235.5 million to Bangladesh, US$250 million to Turkey, US$279 million to Tunisia, US$126 million to Egypt, US$35.7 million to the Palestine Authority, US$28.3 million to Mozambique, US$10.5 million to Jordan, US$62.5 million to Libya, US$11 million to Burkino Faso, US$20 million to Benin, US$15 million to Guinea-Bissau, US$20.2 million to Uganda, US$22.5 million to Mali, US$46.2 million to Cote d’Ivoire, US$25m to Sierra Leone, US$20 million to Chad, US$35 million to Sudan, US$162 million to Senegal, US$5 million to Djibouti, US$25.6 million to Maldives, US$11 million to Kyrgyzstan, US$9.13 million to Tajikistan, US$143 million to Uzbekistan and US$33 million to Mauritania.
Dr Hajjar also had virtual meetings with Algerian Finance Minister Abderrahmane Raouya; Cameroon Minister of Economy & Planning of Cameroon, Alamine Mey; Nigerian Minister of Finance, Mrs. Zainab Shamsuna; Indonesian Finance Minister Sri Mulyani Indrawati and Iranian Vice Minister of Economic Affairs and Finance, Saed Ali Mousavi to finalise similar emergency financing packages.
The total initial funding allocated in April amounts to US$1,723.43 million, which is well over half of the US$2.3 billion COVID-19 IsDB Group emergency aid package announced at the end of March. The six biggest recipient countries are Tunisia, Turkey, Bangladesh Senegal, Egypt and Uzbekistan, which together accounted for US$1,195.50 million of the allocation.
“The US$2.3 billion Programme,” according to Dr Hajjar, “aims to support Member Countries’ efforts to prevent, contain, mitigate and recover from the impact of the COVID-19 pandemic. The Programme envisages a holistic approach in the short, medium and long term, accommodating priorities beyond the immediate and emergency response to the health sector, while putting Member Countries back on the path of economic recovery through restoring livelihoods, building resilience and kick-starting economic growth. The Programme adopts a 3-R approach, with each component focusing on Respond, Restore and Restart and with technology playing a key role at each stage.”
The IsDB, adds Dr Hajjar, “is focusing on the core of the problem – the health aspect. The economic repercussions, albeit crucial, are only symptoms or consequences of the disease. In contrast, the critical challenge that must be addressed is to create a vaccine for the virus and to support health systems towards safeguarding lives.” This opens up the possibilities to local and international companies of procurement, provision of medical supplies, equipment and services, and IT innovations in healthcare management through apps in pursuit of contact tracing etc., and in mitigating supply chain disruptions in food security, and its associated impact on employment.
The IsDB estimates that global GDP growth would fall by 0.5% – 1.5% as a result of the crisis, and according to the United Nations Conference on Trade and Development (UNCTAD) an estimated loss to the global economy of US$1-US$2 trillion in 2020. The International Labour Organisation (ILO) also estimated a loss of 25 million jobs.
“Global supply chains,” reminded Dr Hajjar, “stand disrupted as a result of poor trading conditions, with small and medium-sized enterprises (SMEs) being among the hardest hit. The economic crisis, compounded with dampened economic activity, commodity price crashes, lower tax receipts and low investments presents a huge risk to the Member Countries with a long-term impact on growth and productivity.”
As of 30 March, says the IsDB there have been more than 61,794 confirmed COVID-19 cases in 52 Member Countries, although this figure has increased markedly during April. “Simulation models on the spread of the virus indicate that there may be an exponential rise in the number of cases unless stringent action is taken to suppress the spread. Member Countries with weak healthcare systems are at an extremely high risk,” he explained.