Arab media is reporting that the World Bank and Islamic Development Bank have signed an agreement to collaborate in the development of Islamic finance. According to the report:
ARAB NEWS Last Update 15 October 2012 1:39 pm The World Bank and Islamic Development Bank have signed a Memorandum of Understanding (MoU) to set out a framework for collaboration between the two parties and lend support to global, regional and country efforts in the development of Islamic Finance. World Bank Managing Director Dr. Mahmoud Mohieldin and Islamic Development Bank Group President Dr. Ahmad Mohamed Ali signed the memorandum on behalf of their institutions with the common objectives of fostering, encouraging, and studying the expansion of Islamic finance globally.In 2001, the Wall Street Journal explained the role of the World Bank which has the major role in influencing the bank’s polices:
The MoU adopts the following principles: Knowledge sharing to identify and disseminate sound practices in the Islamic financial services industry. Cross fertilization of ideas that would foster the development of Islamic finance that is critical for growth, efficiency and financial inclusion. Encourage research and promote awareness of appropriate risk management framework for Islamic financial institutions in particular and the Islamic finance industry in general; and Capacity building in the Islamic financial services industry with a view to fostering financial stability and promoting increased access to Islamic financial services in markets around the world. World Bank Managing Director Dr. Mahmoud Mohieldin stressed the importance of the memorandum for increased capacity-building and knowledge-sharing between the two organizations. ‘
Read there rest here.
The U.S. helped launch the World Bank and the IMF after World War II and later became a founder of the regional development banks, including the Inter-American Development Bank, the African Development Bank and the Asian Development Bank. Using capital provided by the shareholder nations, the banks make loans to developing economies and use some of the proceeds to provide aid to the world’s poorest nations. The U.S. is the only nation with its own board seat at all the multilateral development banks, giving it outsize influence to shape their policies. At the World Bank, for instance, the U.S. maintains veto power over governance changes and the institution’s president has always been an American.In an article on “financial jihad”, authors Rachel Ehrenfeld and Alyssa A. Lappen provide some useful information about the role of the Islamic Development Bank (IDB), known to have funded many global Muslim Brotherhood/Hamas-related projects:
In 1969, the Saudis convened Arab and Muslim states to unify the “struggle for Islam,” and have ever since been the Organization of the Islamic Conference’s (OIC’s) major sponsor. The 56 OIC members include Iran, Sudan, and Syria. The Jidda-based, “pending the liberation of Jerusalem,” OIC’s charter mandates and coordinates “support [of] the struggle of the Palestinian people, . . . recovering their rights and liberating their occupied territories.” The OIC charter includes all the MB principles. Its first international undertaking in 1973 was to establish the Islamic Development Bank (IDB) “in accordance with the principles of the shariah,”as prescribed by the MB—and to launch the fast-growing petrodollar-based Islamic financing market. The IDB, more a development than commercial bank, was established largely “to promote Islamic banking worldwide.” “[A]n Islamic organization must serve God… and ultimately sustain …the growth and advancement of the Islamic way of life,” writes Nasser M. Suleiman in “Corporate Governance in Islamic Banking.” And the IDB has done just that. Between 1975 to 2005, the IDB approved over $50 billion in funding to Muslim countries, ostensibly to develop their economic and educational infrastructures, but effected little regional economic impact. Its educational efforts, however, paid huge yields—via the rapid and significant spread of radical Islam worldwide. Moreover, in 2001 alone, the IDB transferred $538 million23 raised publicly by Saudi and Gulf royal telethons to support the Palestinian intifada and families of Palestinian suicide bombers. The IDB has also channeled UN funds to Hamas, as documented by bank records discovered in the West Bank and Gaza. Yet, the IDB received UN observer status in 2007. According to a 1991 U.S. Library of Congress report on Sudan, the IDB also supported Faisal Islamic Bank, established in 1977 under Sudan’s Faisal Islamic Bank Act by Saudi prince Muhammad ibn Faisal Al Saud and managed by local Muslim Brotherhood members and their party, the National Islamic Front. Soon other political groups and parties formed their own Islamic banks. Together, Sudanese Islamic banks then acquired 20 percent of the country’s deposits “providing the financial basis to turn Sudan into an Islamic state in 1983, and promoting the Islamic governmental policies to date.” Sudan Islamized its banking in 1989. However, Pakistan was the first country to officially Islamize its banking practices, in 1979.Previous posts have discussed the role of the IDB in funding a project of a Ukrainian Brotherhood organization, in financing the projects related to the Islamic Society of North America (ISNA), and sponsoring a philanthropic conference held by an organization with Brotherhood ties. Another post noted that IDB representatives were in attendance at a Saudi charity seminar attended by Wael Julaidan, possibly the known founder and financier of Al Qaeda. Another earlier post noted that former ISNA President Ingrid Mattson attended a 2010 meeting of the Islamic Development Bank to select members for the bank’s Women’s Advisory Panel. A post from May 2011 reported that the Islamic Development Bank (IDB) awarded the 2001 Prize in Islamic Economics to the U.K. based Islamic Foundation, close to both the Pakistani Islamist group known as the Jama’at-e-Islami as well as to the Global Muslim Brotherhood .
It should also be noted that Islamic finance has played a major role in enriching Global Muslim Brotherhood leaders such as Youssef Qaradawi who site on the Shariah advisory boards of many of the major Islamic financial organizations.
(Note: We learned about the World Bank/IDB agreement from a Money Jihad report.)
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- Ingrid Mattson Attends Meeting Of Islamic Development Bank In Saudi Arabia
- RECOMMENDED READING: “Egypt Islamic Finance Sector Faces Uphill Struggle”
- RECOMMENDED READING: Islamic Finance Or Financing Islamism?