Indonesia becomes 3rd largest shareholder of Islamic Development Bank

Indonesia becomes 3rd largest shareholder of Islamic Development Bank

Jakarta, The Gulf Observer: The Indonesian government has increased its shares in the Islamic Development Bank (IsDB), making it the third-largest shareholder of the institution after Saudi Arabia and Libya, according to a statement released on Sunday.

At IsDB’s 48th Annual Session in Jeddah, Saudi Arabia, held on May 10-13, 2023, the institution’s board of governors unanimously approved the proposal to increase the Indonesian government’s shares.

“I hope that by increasing the share, the cooperation between Indonesia and IsDB can improve and bring prosperity to all people,” Indonesian Finance Minister Sri Mulyani Indrawati said at the IsDB annual session.

She further said that this move could provide various strategic and economic benefits for Indonesia, including increasing Indonesia’s bargaining position within IsDB and increasing IsDB’s financing potential to Indonesia by 3.5 to 4 times.

By becoming the third-largest shareholder, Indonesia can assert its contribution to the international community by helping determine the direction of global development through its membership in IsDB as a multilateral development bank.

Indonesia can also actively and directly participate in the operation of IsDB to improve the welfare and help eradicate poverty in IsDB member countries, many of which are low-income Muslim countries.

In addition, Indonesia will be able to further encourage IsDB’s involvement in various development programs in the country, including in the Islamic economic and finance sector.

Indrawati emphasized that Indonesia is committed to closely collaborate with IsDB to provide long-term positive benefits on Muslims and the international community.

“Strengthening cooperation, especially in the face of various current global economic challenges, is the goal that will be realized in line with the increase of Indonesia’s role and share in IsDB,” she added.

As of December 2022, IsDB has provided US$6.3 billion financial support for Indonesia, mostly in the agriculture, education, industry and mining sectors.

IsDB is the only multilateral development bank that applies Sharia principles. The institution also promotes South-South cooperation as the majority of its members are developing countries.