JEDDAH — Hani Salem Sonbol, CEO of International Islamic Trade Finance Corporation (ITFC), was of the view that supporting SMEs and local exporters and enabling them to continue trading during this challenging period is a crucial part of ITFC’s COVID-19 response strategy for sustainable development. He spoke to Saudi Gazette on IsDB Group Private Sector Action Response to COVID-19. Here are the excerpts:
Q: What are the areas of cooperation between Saudi Arabia and ITFC?
A: The Kingdom of Saudi Arabia is the largest shareholder of ITFC and has been a BIG supporter to all ITFC’s programs and initiatives since its establishment in 2008. Several specific programs have been implemented to achieve economic and social development in member countries and Saudi Arabia through its continuous support, played a great role in the success of these programs. A good example is participation of Saudi businessmen in the activities of The Arab Africa Trade Bridges (AATB) Program a flagship program that aim at enhancing the trade and investment relationship and explore new Business opportunities between the two regions.
Another program that was highly supported by Saudi Arabia is the Aid-for-Trade Initiative for the Arab States program (AfTIAS) led by ITFC. The Kingdom of Saudi Arabia was the first donor for both phases of the program, which benefited most of the Arab member countries. This program, which provided capacity building, training, strategy formulation and enhanced strategic sectors such as agriculture and industry. The participation of Saudi businesses was a success factor for all these events. In addition, the development of the Madinah region dates sector to support value chains by enhancing value-added production and trade flows is another example of the excellent example of such support.
Supporting such SMEs and local exporters and enabling them to continue trading during this challenging period is a crucial part of ITFC’s COVID-19 response strategy for sustainable development.
In KSA, ITFC remains committed to implementing trade enhancement programs, which serve to boost SME growth during a time of global economic stagnation, constrained movement of goods and a reduced demand in the oil sector. The latter brings the objectives of Saudi Vision 2030 into even sharper focus during COVID-19, reinforcing the need for a robust, diverse, and balanced economy.
The ITFC is also cooperating with the Saudi Export promotion Agency, under the Kingdom’s Vision 2030, to support the diversification of the economy by supporting high potential exporting Saudi companies and the implementation of the program is progressing well.
Q.What is the main objective of the Webinar on IsDB Group Private Sector Action Response to COVID-19?
A: The webinar — which was conducted by The Islamic Development Bank Group (IsDB) in partnership with the UAE Ministry of Economy and Annual Investment Meeting was entitled ‘IsDB Group Private Sector Action Response to COVID-19’. During the sessions, participants discussed the challenges facing the private sector and global economy during the COVID-19 outbreak.
The immediate joint action response of the IsDB Group Private Sector Entities namely, the Islamic Corporation for Insurance of Investments and Export Credits (ICIEC), Islamic Corporation for the Development of the Private Sector (ICD), and the International Islamic Trade Finance Corporation (ITFC), to overcome the COVID-19 pandemic was presented. The central focus for the webinar series is the sharing of knowledge and experiences so that all nations and citizens can benefit, including those working to fight COVID-19 in Saudi Arabia.
During the webinar, several programs were discussed, including the ITFC COVID-19 ‘Rapid Response Initiative’ (RRI), under which ITFC made $300 million immediately available. This has facilitated the immediate procurement of medical equipment, the supply of staple foods and critical energy needs. Continuing to work closely with IsDBG and partners, ITFC is moving forward with its Recovery Response Plan (RRP) with the provision of $550 million for deployment over the next two years. The RRP is aimed at reversing the socio-economic impact as it is expected to last longer than immediate impact of the virus; including the provision of support to fund the private sector and SMEs.
Q. You announced $850 million allocation for COVID-19, where are your projects in this regard? Please give examples!
A. The Islamic Development Bank (IsDB), which is headquartered in Saudi Arabia, pledged $2.3 billion for the Group’s Strategic Preparedness and Response Program for COVID-19 pandemic. The Program adopted a 3-R approach, with each component focusing on Respond, Restore and Restart, in March 2020, aimed at softening the health and socio-economic impact of the outbreak. As part of this Program, on April 6, ITFC announced $850 million for emergency pandemic interventions, where ITFC’s COVID-19 ‘Rapid Response Initiative’ (RRI) made $300 million immediately available.
An additional fund – the ‘Recovery Response Program’ — earmarks another $550 million for deployment over the next two years. For example, In June 2020, ITFC signed a $200 million syndicated Murabaha financing agreement with the African Export-Import Bank. That agreement specifically finances in Africa, the import and export of soft commodities, such as raw cashew nuts, cocoa, sesame seeds and maize — activity that is crucial in the pursuit of food security and boosting export trade. Financing agreements such as these enable African countries to continue to import basic commodities they need to function during the pandemic (and beyond) — and that includes being able to import high quality goods from Saudi Arabia.
ITFC participated in the virtual workshop on the concept of a post-COVID-19 development program for Al-Madinah Al Munawara, organized in June 2020, under the patronage of Prince Faisal Bin Salman, Governor of Madinah Region. The recommendations of the workshop are under consideration for design and implementation in the context of post-COVID-19 development. — SG
