Indonesia, IDB, Turkey formulate Mega Islamic Bank

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Photo by Finance Ministry

JAKARTA (TheInsiderStories) – Indonesia, Islamic Development Bank (IDB) and Turkey formulating the establishment of of Mega Islamic Bank (MIB), which is expected to be a solution to the availability of funds for infrastructure development and liquidity needs of Islamic countries, said one official.

Last week, Finance Minister Bambang Brodjonegoro in the middle of IMF-World Bank Spring Meeting has a tripartite meeting with IDB president Ahmad Mohamad Ali and the deputy prime minister of Turkey, Ali Babacan, on the establishment of the Islamic Mega Infrastructure Bank to be cofounded.

“It is not final yet, Indonesia, Turkey and the IDB will appoint senior officials to formulate the governance structure in more detail, the target is six months from now,” he told reporters recently.

Head of the Fiscal Policy Office Suahasil Nazara, said the meeting agreed to assign senior officials of Indonesia and Turkey to further discuss the organizational structure and business schemes MIB.

“We will together form a small team to talk about the structure of the organization,” he said.

Turkey and Indonesia have six months to complete the organizational structure. The team also will discuss the operational line MIB. Some options smuncul eg lines separate operations in Jakarta, Jeddah and Istanbul that will surround the Islamic countries in the vicinity.

Sharia economy was on the rise in recent years. Suahasil mention research that concluded Deloitte global needs of Islamic financial instruments will continue to soar. Not only from Islamic countries, the need for global Islamic financial instruments has also increased.

Meanwhile, the Centre for Climate Change Financing Policy and Multilateral BKF Ministry of Finance Syurkani Isaac Kasim added MIB function is slightly different from the IDB to focus on development issues in general. ADB has a wider scope including gender equality, education, health, and disaster mitigation.

While candidates for this agency will focus on promoting economic growth in Islamic countries. “More towards supporting economic growth,” he said.

Mega Islamic Bank will be directed at financing long-term infrastructure. In addition, the institute also candidates to support the addition of liquidity in the economy of Islamic countries.

Liquidity is a major issue for developing countries like Indonesia, which was supposed to have high economic growth. The economic slowdown that occurred since 2008 until now to make the developing countries lose their source of funding to boost economic growth. This happens because during this source of funding is limited to the western countries, even though their economy is in trouble.

“With the Mega Islamic Bank, diversified funding sources in order,” he said.

In the process of the formation of MIB, Indonesia and Turkey as initiators invited Islamic countries to join in this institution.

 

 

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Source: The Insiderstories
Indonesia, IDB, Turkey formulate Mega Islamic Bank

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