ISLAMIC DEVELOPMENT BANK STATEMENT OF DR. AMADOU BOUBACAR CISSE Vice-President (Operations) At the HIGH-LEVEL FORUM ON AID EFFECTIVENESS (ACCRA, 4 SEPTEMBER 2008)

Thank you, Mr. Chairman,
and many thanks to the organizers of this Forum, particularly the Ghanaian authorities, for the arrangements made and the warmth of the reception.

Mr. Chairman,
The Islamic Development Bank (IsDB) is a non OECD-DAC institution: it is a pure South-South instrument as its 56 member countries (which are also its recipients) are all at a developing stage, although they have rather diverse financial capabilities.

Being outside the OECD-DAC does not mean that we are alien to aid effectiveness: indeed, we have been actively involved in the aid effectiveness process since Monterrey as we find it fully consistent with our own development mandate. We also helped in the preparation of this High Level Forum by organizing an introductory workshop in Jeddah on this subject earlier this year for some of our member countries.

I would even dare to say that we were pioneers in this domain as, 33 years ago, alongside several development financing institutions owned, fully or in majority, by Arab countries, we established "the Coordination Group" whose prime objective was to ensure that the assistance it extended was used in an effective manner. Although, at the time, we did not use the terms of ownership, alignment and harmonization, the concepts were there and were put into practice.

Mr. Chairman, The political issues that are tabled for this morning discussion are of course of particular importance for the IsDB as nearly half of our members are among the world's least developed countries. I would therefore like to briefly comment on three of these issues.

The first one is the food crisis. Since this crisis is, at least partly, the result of under-investments in the agricultural sector, it is essential to correct this situation in a manner that would unleash the full potential of this key sector. Thus we, at the IsDB, have decided to allocate $1.5 billion dollars for that purpose. A challenge would however be to ensure that this is utilized as planned. Indeed, in recent years, although we had more modest objectives, we were unable .to actually achieve our financing targets for that sector, mostly due to :Lack of suitable projects.

Therefore, while calling on donor countries and institutions to increase their support to agriculture, I wish to also request the recipient countries to accord top priority to this sector in their investment plans and to playa leadership role in their dialogue with donors on this matter. The second issue that I would like to address is that of energy. Heavy dependence on imported oil implies foregoing national development projects and programs. It is therefore imperative that donors scale up their assistance to higher levels to support infrastructure, particularly endogenous energy generation projects, such as hydropower schemes whenever such resources exist, keeping in mind that such investments of strategic importance should not be looked at only in the light of classical economic justification. IsDB has been doing that, from Pakistan to Morocco and from Tajikistan to Mali. The difficulty is however that these schemes often require large sums of money. Our point of view is that it would be preferable to finance such investments on concessionary terms but, if no concessionary financing is available, this should not be a reason for deferring the investment indefinitely, as it would have grave consequences of the type we are witnessing nowadays. Other modes of financing should therefore be considered, rather than sitting under a tree and waiting for the soft resources to come!

The last point I want to comment on is the increasingly complex aid architecture. The emergence of new donors has to be welcomed since they offer new opportunities to the partner countries, particularly if one sees that these new donors are equally committed to most principles of aid effectiveness. What is essential is that this phenomena is managed at the country level and that this new financing is seen as an additional financing, and not be taken as a pretext by the traditional donors for considering they are relieved of their responsibilities.

These are a few points that I wanted to make on behalf of the Islamic Development Bank. I hope they will contribute positively to the deliberations of this conference.

Thank you.