THE ACTIVITIES OF THE ISLAMIC DEVELOPMENT BANK IN SOUTHERN EURASIA: IDENTITY-FRAMED COOPERATION OR CHANNEL FOR ARAB GULF INVESTMENT?
Keywords:
development aid, alternative trade, Islamic Development Bank, Organization of Islamic Cooperation, South-South cooperation, Arab Gulf countriesAbstract
This article examines the activities of the Islamic Development Bank in Azerbaijan, Kazakhstan and the four other Muslim majority states of southern Eurasia, where the institution has been active, in a rather discreet but targeted way, in the fields of transport, energy and water infrastructure, finance and industrial development since about one and a half decades.
Besides offering an analytical overview of the regional activities of this rather little-known development institution, it discusses how it is de facto a channel and way-opener for investment form the Arab and more particularly the Arab Gulf sphere, and how its presence fits into a trend among southern Eurasian governments and economic elites to diversify sources of aid and investment.
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This article was previously published in a different working form in the online Central Asia Economic Papers series
of the Elliott School of International Affairs.
See: Islamic Development Bank, The Islamic Development Bank Group in Brief, IDB Economic Research and Policy Department, 1433 H. (2012), p. 1 and the IDB Portal, “About IDB” section, available at [www.isdb.org].
One of the fundamental criteria for OIC membership besides being a recognized state by the U.N. is that if not a majority then or at least a significant portion of the state’s population adheres to the Islamic faith or is at least culturally as-sociated with it. All southern Eurasian countries mentioned in this brief became OIC members in 1992 with the exception of Kazakhstan and Uzbekistan which did so in the years 1995 and 1996, respectively.
There is an understandable rationale behind this, though. The six southern Eurasian states and Albania all experienced a form of Socialist-Communist societal transformation project and were largely cut off from the wider Muslim Ummah for decades. As such, they have if not a common then at least a similar development paradigm from the IDB’s point of view.
The breakdown per country of these 0.35 percent comes at 0.10 percent for Azerbaijan, 0.11 for Kazakhstan, 0.03 each for Tajikistan, Turkmenistan and Uzbekistan, and 0.05 percent for Kyrgyzstan.
Turkmenistan and Kyrgyzstan, for example, have comparable populations yet while development and rehabilitation needs in Kyrgyzstan are also strong, Turkmenistan received five times more IDB investment. A similar situation exists between Tajikistan and Azerbaijan.
See: R. Upadhyay, “The Saudi Monarchy: Against the Revival of the Caliphate?,” South Asia Analysis Group, Paper No. 3935, 2010; Kh. al-Yahya, N. Fustier, “Saudi Arabia as a Humanitarian Donor: High Potential, Little Institutionalization,”GPPI Research Paper No. 14, 2011.
Detailed project lists can be found in all annual reports of the Islamic Development Bank from the year 1420 to 1432 H. (1999 to 2011). These were used by the author to make this summary.
For a more detailed overview, see: J. Kuddusov, Vliianie mirovogo finansovogo krizisa na trudovykh migrantov iz Tadzhikistana: mnenie migrantov, International Labor Organization Office for Eastern Europe and Central Asia, Moscow, and Ministry of Labor of Tajikistan, Dushanbe, 2009, Table 2, p. 5.
Niche business migration and financial interaction between southern Eurasia and the UAE and especially Dubai has put the latter on the region’s mental and economic map though.
The IDB’s de facto capacity as a channel for Arab investment becomes clearer when one takes into account the real-ity that large non-Arab IDB states like Turkey and Iran have a substantive economic presence in southern Eurasia outside of the IDB structures. Turkey and Iran also play a central role in another, regionally defined development bank: the Economic Cooperation Organization Trade and Development Bank (ECOTDB).
See: E. Woertz, S. Pradhan, N. Biberovic, Ch. Jingzhong, Potential for GCC Agro-investments in Africa and Central Asia, Gulf Research Centre: GRC Report, 2008, pp. 6-7. In spring 2014, the IDB pledged $2 billion of multisectoral support to Kazakhstan for the 2015-2017 period, including to Kazakhstan’s initiative to create the Islamic Organization for Food Se-curity (IOFS) under the OIC. The IOFS is to be headquartered in Astana.
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