Islamic Development Bank President Bandar Hajjar yesterday stressed the importance of the private sector to improve the basic infrastructure in its member countries and achieve the Sustainable Development Goals (SDGs).

Fifty-seven member countries of the IDB require $1 trillion per annum to achieve the SDGs and $700 billion to meet the growing demand for basic infrastructures, he said.

He said the multilateral development banks have a financing capacity of $147 billion per annum for the IDB's members.

“How will we fill up the gap? A vibrant private sector can only fill up the vacuum,” he said at a press conference at the IDB Bhaban after the opening of the bank's regional hub in Dhaka.

Earlier, Prime Minister Sheikh Hasina opened the regional hub of the bank. Bangladesh is the largest beneficiary of financing from the multilateral bank, with its total financing for the country being in excess of $21.7 billion.        

Of the funds, 80 percent went to the private sector, Hajjar said. He said the IDB has adopted a new model to encourage the private sector which will play a vital role in developing the human capital of the member countries.

The member countries will have to extend support to give a boost to investment in the private sector, he said, adding that the MDBs should also help them transform their economies with market-oriented growth.

“We are transforming our bank not only for finance; we have focused on increasing the capacity of human capital and build the institutional capacity of our member countries,” he said. The IDB president said the volume of the global capital market has gone beyond $2 trillion and the private sector can get support from the window.

There is a requirement to develop an investment-friendly environment to use the fund of the capital market, he said. Speaking at the briefing, Finance Minister AMA Muhith said over the years, the IDB has gradually established itself as one of the leading multilateral development banks in the world.

The bank has embraced new ideas, come up with innovative financial instruments and expanded its remit substantially, he said. He said the scope for Bangladesh to get soft loans is gradually shrinking as it has become a lower-middle country from a low income nation.

The country has ability to take loans at higher interest rate than the rate entailed with soft loans offered by the MDBs, he said. The regional hub in Dhaka will cover 19 countries, including Singapore, Australia, Thailand and India.

Asked why the IDB chose Bangladesh to set up the regional hub, Hajjar said geographical location was one of the major reasons. Besides, a strong growth of Bangladesh and its skilled workforce, educated people, resources and leadership have also been considered, he said. “The IDB has long held a close relationship with Bangladesh as it continues to move towards a prosperous future.”

“Our regional hub will focus on partnering with local stakeholders to drive the socio-economic development in the country and provide a platform for Bangladesh's people to build a prosperous future,” he said.

Fourteen people, including four foreign nationals will initially work at the regional office and the number will increase if required, Hajjar said.