Riyadh, Kingdom of Saudi Arabia – Islamic Development Bank (IsDB) President and Group Chairman, H.E. Dr. Muhammad Al Jasser, was a keynote speaker at the financial Sector conference in Riyadh which brought together ministers, financial industry decision-makers and senior executives.
The IsDB President spoke about The Place for MDBs in the Broader Financial Ecosystem and at the onset thanked the conference organizers including the Saudi Ministry of Finance, Saudi Central Bank and the Capital Market Authority for the invitation and the opportunity to address the high-level attendees on an important topic.
In his speech, Dr. Al Jasser touched upon the economic crisis witnessed in recent years instigated by multiple challenges including the COVID-19 pandemic, the Russia-Ukraine conflict, the rise in food and energy prices, which have adversely affected development progress and pushed 100 million people into extreme poverty. He then stated that the situation could become worse if timely action is not taken, especially in the face of growing fragmentation in the global economy.
“At this juncture, there are obvious threats to the global economic system. Therefore, there is a need for MDBs to step up their efforts to meet these challenges by playing a critical role in the global financial ecosystem, bringing together countries and other development stakeholders to address common economic challenges.” He elaborated.
Dr. Al Jasser highlighted the critical role of MDBs as financiers and knowledge partners, “MDBs are increasingly becoming more relevant today than ever, playing an instrumental role in the global financial ecosystem. Given the challenges of today, timely actions and policy directions by MDBs could steer us back on the road to recovery and building green and resilient economies” he added.
In his remarks, the president emphasized the importance of maintaining a robust financial ecosystem that complements all stakeholders' objectives to strengthen development impact and mobilize funding. “Governments, development financial institutions, institutional investors, capital markets, philanthropists, and others should work together to develop new financial instruments to maximize the supply of development funds. MDBs should not give up the dreams of ‘billions to trillions’ but exert more efforts to find innovative solutions that incentivize private sector investments.” Dr. Al Jasser stated.
On the role and place of MDBs, the president underscored that MDBs are well positioned to help member states strengthen their regulatory frameworks, improve transparency and accountability, and help develop domestic capital markets, which are critical criteria for attracting private investors. MDBs also possess the skills and knowledge necessary to monitor and manage projects in developing countries perceived to be risky by others. As a result, the private sector can delegate the monitoring of investments to MDBs, who, in return, will guarantee the investors' capital is protected and fair economic and social returns are earned. Furthermore, MDBs can lend technical expertise in providing evidence-based policy recommendations on debt sustainability and fiscal spending.
Dr. Al Jasser concluded his speech by advocating for strengthening multilateralism and coordinated efforts among countries and institutions to address challenges and achieve shared goals as he conveyed that the Islamic Development Bank is committed to supporting the development of an inclusive financial ecosystem based on multilateral values and Islamic finance principles. “We are energized by the significant role MDBs could play in the post-crisis world and look forward to welcoming partners in this noble cause.”