Multilateral development financier Islamic Development Bank (IDB) is looking to enhance its support for Bangladesh in developing the country's human capital, its President Dr. Bandar M. H. Hajjar has said.
The Jeddah-based development partner is also looking to adopt a 'value chain' approach in implementing its development scheme in the country, Hajjar has said.
The IDB President, who is now in Dhaka to inaugurate the bank's regional hub in the Bangladeshi capital, shared his views on Bangladesh and its development trend during an interview on Saturday.
"The world is now entering a new era- and this era is marked by huge challenges", Hajjar said.
"If you look at countries like South Korea or Singapore, they have become industrialised through investing in science, technology and innovation and through building their human capital".
"Our member countries can also do that. But they need someone to support them in the right direction and to stand by them", the IDB President said.
"This is what we are doing. We are not just focusing on financing infrastructure".
"Robust infrastructure is important. But even more important is human beings or human capital", he said.
"So, if we can create a strong pool of human capital that is qualified to build their own future and support their communities and countries, they will take the country forward", Hajjar, who inaugurated a science and technology competition organised by IDB during his first day in the capital, said.
"The economic growth of a country no more depends on natural resources. What we really need now is technology", Hajjar said.
"Development is not just about finance. It is something beyond finance. It is about human capital", he added.
During his three-day long trip in Bangladesh, Mr. Hajjar would formally inaugurate the IDB regional hub in Dhaka- a move often seen as a timely decentralization process by IDB.
"Since taking the office in 2016, I have wanted IDB to be fast and proactive in responding to the needs of the member countries and also to accelerate the implementation of our projects", the IDB President said.
"But, It is very difficult to manage the activities of 57 member countries from the headquarters in Jeddah. So, we decided to open 11 regional hubs to serve our member countries and to be close to our people".
"At the same time, we are intending to create a development network which would include various partners and stakeholders like private sector, NGOs, civil societies, universities and research centers to be close to our member countries".
"And we choose Dhaka as one of our regional hubs because of its geographical location and also because we think it is an ideal place to create that development network", Hajjar observed.
"Apart from accelerating the implementation of our projects and programs here in Bangladesh, this regional hub will serve Muslim communities in several non- member countries like Singapore, Australia, Thailand, India and so on".
Currently, IDB is formulating its second generation Member Country Partnership Strategy (MCPS) for Bangladesh which would chalk out the areas where the multilateral development bank would invest in the next three years.
"We have recently adopted a new approach called value chain approach which is aimed at an integrated work programme instead of disintegrated implementation of projects", Hajjar said.
"I think this approach will increase the impact of our development works in Bangladesh and other countries".
"Because, under this new approach, we are going to bring all the relevant partners and stakeholders on board", he added.
"This approach would look to create value chain for all partners and stakeholders including government, private sector, NGOs, CSOs, universities, research centers, Islamic banks involved in a certain project".
The IDB President also emphasised on greater involvement of the private sector in the development process and creating a congenial environment for private investment.
"I noted that Bangladesh government is currently encouraging the private sector to invest in various projects and IDB also supports this direction", Hajjar said,
"Because, the financial resources of IDB and all other multilateral development banks together will not be enough to meet the development needs of our member countries", he added.
"The total amount of development finance required by our member countries until 2030 is about US$ 1.0 trillion. But the total amount of financing available with the multilateral development banks is about US$ 147 billion. So, the gap is huge".
"This is the reason why we encourage the government to support the private sector in taking a greater role in the development", he said.
"But what we really need is to mitigate the risk and create the right environment for attracting more private sector investment in the country", he added.
Last year, IDB decided to sell off two-thirds of its shares in Islami Bank Bangladesh Limited (IBBL)-Bangladesh's leading PCB. The move came at a time when IBBL was facing a series of turmoil.
When asked about this move, Mr. Hajjar however brushed off any notion that the decision to sell off the shares has anything to do with the recent struggles of IBBL.
"IDB has a policy with regard to entering and exiting from any project- especially when it comes to the Islamic banks", Hajjar said. ."Any of our projects including the Islamic banks need the support of the IDB at the initial stage. But when we feel that these banks have gained enough strength, we opt to exit from it".
"This is because our purpose is not to generate profit but to support the country to establish these institutions", he said.
"So, when we pull out or exit from any project, it is not because that project is not feasible or it is facing problem- but because we feel that this institution is strong enough".
"We exit and look to support other institutions in other countries which may need IDB support", he added.
Headquartered in Jeddah, the membership of IDB currently consists of 57 countries.
Bangladesh is the biggest recipient of IDB financing among its member countries, receiving more than US$ 21.9 billion of financing since 1974 including trade insurance and trade financing.