Special Account For The Ldmcs

In addition to the financing of poverty-oriented projects under its ordinary operations, the IDB has established a special programme of assistance for its least developed member countries (LDMCs). This programme is intended to increase the total resource made available to the member countries by supplementing the assistance made available to them from the regular resources of the IDB. It is also intended to finance projects normally not financed by the IDB under its regular programme because of their size and nature and the need for special rules and procedures different from those usually applied by the IDB. For this purpose, the bank has established a $ 100 million special account for the LDMCs. This account was established by the 17th annual meeting of the bank's board of governors held in Tehran in November 1992.

The objective of the programme is to help in meeting the urgent and basic needs of the people, especially those of the poor, in the LDMCs by:

1. Increasing their productivity, income and opportunities for employment;
2. Providing outlets, especially for the rural poor, so as to enable them to market their products and secure ready access to inputs and consumer goods; and
3. Improving their quality of life through greater access to education and health facilities.

Projects to be financed under the programme are generally from the priority sectors for the LDMCs contained in the IDB's strategic plan. Emphasis is given to projects in the following sectors:

1. Agriculture, including fishing and animal husbandry, with the aim of achieving food security and rural development in general;
2. Education, particularly technical and vocational training and upgrading the quality of instruction given by the Qur'anic madrassahs;
3. Health, with emphasis on primary healthcare;
4. Infrastructure, utilities and housing.

The types of projects financed under this programme are generally small-scale, requiring limited financing and simple technology and management. In addition, they are for the most part those projects which have an immediate and noticeable beneficial impact on the income, employment, productivity and living conditions of the people in the project area, especially the poor. Projects of this type are financed either totally from the account or they may be cofinanced with the regular programme of the IDB. Examples of such projects are as follows:

Agriculture, Fishing And Animal Husbandry

1. Projects designed to enable small farmers, fishermen and cattle raisers to have access to instruments and equipments such as farm instruments, fishing boats and outboard motors, fertilizers, and other materials and inputs;
2. Water points to provide drinking water for human beings and cattle and small-scale irrigation schemes designed to increase rural productivity;
3. Training programmes in modern methods and related skills for small farmers, fishermen and cattle raisers as well as for those who would provide training in these areas and extension services intended to increase their productivity;
4. Constructing and maintaining rural feeder roads linking rural areas with neighbouring towns and cities;
5. Assisting small rural producers to organise cooperatives designed to market their products and to engage in bulk purchase of inputs and consumer goods;
6. Vocational training for trainers and for the unemployed in rural and urban areas in fields such as carpentry, masonry, plumbing, etc.

Education

1. Rehabilitating and improving primary and secondary schools and constructing new ones, especially in rural areas;
2. Upgrading the quality of madrassahs by enabling them to expand their curricula to include technical and vocational training designed to help their graduates to secure gainful employment;
3. Training for the teaching, medical and paramedical and agricultural staff in educational, health, and extension services as well as training for individuals who will train others;
4. School supplies and equipments such as desks, chairs, tables, textbooks, laboratory equipment, etc.

Health

1. Rehabilitating and upgrading clinics and health centres as well as veterinary centres in rural areas and poor neighbourhoods in urban centres and the construction of new facilities in areas which presently lack these;
2. Assisting health establishments to acquire vital and basic equipment and supplies, notably medicines, medical equipment for diagnosis and treatment (e.g. X-ray machines, dental equipment), hospital beds, laboratories, etc.

Infrastructure

1. Constructing of small infrastructure projects such as feeder roads, telecommunications, water supply dams and electricity-generating plants;
2. Small-scale agro-industries and cottage industries;
3. Maintenance, rehabilitation and improvement of existing infrastructure;
4. Improvement of the supply and quality of housing in urban and rural areas.

Assistance provided under this programme is in addition to the assistance given to the relevant member countries under the ordinary operations, trade financing, special operations, and IDB activities for depressed areas, poverty alleviation and food security. The assistance is in the form of grants for technical assistance and institution-building and project loans. These loans are repayable within 30 years from the completion of the projects, including a 10-year grace period. These loans are subject to a service fee of 0.75 percent to cover the partial cost of administrating the loan.

Special Assistance Programme

a) Special Assistance Projects

In addition to its ordinary operations, the Islamic Development Bank also provides financing for special operations. These operations are financed from the special assistance account of the bank which was established in 1399H (1979). The objectives of this account include the provision of relief in the form of appropriate goods and services to member countries afflicted by natural disaster, and provision of financial assistance to Muslim communities in non-member countries for improving their social and economic conditions.

Since the establishment of the special assistance account in 1399H (1979) up to the end of 1415H (May 1995), the total amount approved reached ID 365.75 million ($435.34 million). This amount was used for 340 operations and programmes in various member countries and for Muslim communities in nonmember countries.

The type of projects that have been financed from this account include construction of primary and secondary schools, libraries, vocational centres, primary health centres, emergency assistance for victims of natural disasters (floods, earthquakes, etc.), and relief assistance to refugees in different countries. To a large extent the primary beneficiaries of most special operations are the low-income groups.

B) Scholarship Programmes

IDB has two scholarship programmes through which it provides financial assistance to deserving students for higher studies in selected areas. The first is the IDB scholarship programme for Muslim communities in non-member countries, while the second is the merit scholarship programme for high technology.

The IDB scholarship programme for Muslim communities in non-member countries was started in 1404 H (1983-84). It is aimed at helping needy and meritorious Muslim students in non-member countries to pursue undergraduate studies in medicine, engineering, dentistry, pharmacy, nursing, veterinary sciences, agriculture and computer studies at universities in their own countries, or in other member countries of the bank. In response to the specific and urgent needs of the Muslim communities in the Commonwealth of Independent States (CIS) and Eastern European countries, the bank has agreed to include in the programme other fields of study such as economics, finance, administration, management, accountancy and marketing.

To implement the programme, the bank cooperates with the supreme council of Islamic organisations or a coordinating committee consisting of several bonafide and active Islamic scholars in the beneficiary countries, which assist the bank in announcing the programme, preparing preliminary shortlisting of the applications, verifying the applicants' documents and in following up progress of students studying under the programme.

The scholarships are awarded as grants to the Muslim communities concerned, and as interest-free loans (qarz-e-hasan) to the academically meritorious and financially needy students whom the communities recommend. The repaid loans are deposited in trusts or woqfs which are established in the beneficiary countries with the help of the bank. The funds thus generated are recycled to help other students from the same communities.

In training young Muslim professionals, the bank also expects that the graduates will play an active role in the development of their respective communities. For this purpose, and with the help of honorary counselors for the scholarship programme who are appointed at places where there are a significant number of stu-dents receiving IDB scholarships, the bank also provides the students with some extracurricular guidance and counseling activities aimed at enhancing their knowledge about Islam and awareness of their social responsibilities.

Since the inception of the programme till 1415H (May 1995), the bank has granted scholarships to students from 42 counties including Palestine, Afghanistan and Albania which, being member-countries of the bank, have also been included in the programme on an exceptional basis. Efforts are being made to include more Muslim communities in the programme.

In 1415H (1994-95), the bank spent a total of about $3.255 million on the programme. The total amount spent since the inception of the programme is $18.347 million for the benefit of 3,170 students. Of this number, 902 students were reported to have completed their courses.

The second programme is the merit scholarship programme for high technology. This programme aims at developing technically qualified human resources in the IDB member countries by providing scholarships to promising and/or outstanding scholars and researchers to undertake advanced studies and/or research in the field of applied science and technology needed for the development of member countries. Although this programme does not have any direct poverty alleviation impact in the short run, its potential contribution of economic development in the long run is expected to be quite significant.

The merit scholarship for high technology was approved by the bank's board of executive directors in Dhul Qada 1409 H (June 1989). The implementation of the programme was approved in Ramadan 1411H (March 1991). During the first five years, more than 100 scholars are expected to benefit from the programme. Currently, scholarships are provided for l6 different fields of study including laser and fiber optics, genetic engineering and biotechnology, nuclear science/engineering, electronics/micro-electronics, chemical engineering/material sciences, topical medicine/prevention of communicable diseases, and food production/conservation technology. The study period is either three  years  for  a  doctorate   degree or one year for post-doctorate research. The programme has been initially established for five years with a total approved budget of $9.223 million. In the five-year period, the programme is expected lo provide scholarships to between 80 and 100 scholars from member countries.

The implementation of the programme began in the academic year 1992-93 (1412H). Since then, a total of 48 promising and renowned scientists from 21 IDB member countries have been selected. Out of these, a total of 36 have obtained places in various renowned institutions in Europe and Americas. A total of 12 scholars have completed their studies and returned to their home institutions and countries.

Source: Poverty Alleviation in Pakistan: Present Scenario and Future Strategy, Mohibul Haq Sahibzada. Republished with permission.