Interest-free Islamic banking, an absolutely workable system, IDB chief says
Regional, Economics, 9/20/1999

President of the Islamic Development Bank (IDB) Ahmad Mohammed Ali described Interest-free Islamic banking as an absolutely workable system.

Mohammed Ali was quoted by Pakistani news agency APP as saying that the system will pose no hurdles in international transactions since Islam is a very flexible religion.

He observed, while speaking in a PTV program, that the interest-free Islamic banking regime has enormous potential to survive the contemporary challenges on economic fronts in Pakistan. However, switching over to this system was not possible over night. The system can succeed effectively but in a gradual manner, Ali said.

He also expounded the main objectives behind the establishment of the Islamic Development Bank which is meant to promote solidarity and strengthen trade relations between the member muslim countries.

He said the bank set up various programs to promote direct trade among the member countries instead of using divergent routes. As an instance, he said Sudan used to purchase Bangladeshi jute from UK till the bank intervened and now this trade is carried directly.

Ahmed said, there was only 4 to 5 percent intra-trade when the bank started functioning which now inched up to 10 percent.

The bank is focusing to further propel it up to at least 15 percent. The ideal intra-trade ratio is around 40 percent, he added.

The member countries should foster hospitable atmosphere as an incentive which would help persuade Arab investors to siphon away their capital to these states from non member countries.

The bank is also working on these lines, he said continuing that $ 1.5 billion fund has been set up for the infrastructure development in the member countries.

He said the bank is also promoting exchange of technology and knowledge among the member countries on fast track which would help ameliorate economic milieu in least developed member nations.

Previous Stories:
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  Seminar on electronic trade held in Casablanca   (6/16/1999)

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