The senior management of two leading multilateral institutions has been reshuffled, with Osama Faquih becoming president of the Jeddah- based Islamic Development Bank (IDB), and his place as Arab Monetary Fund (AMF) chairman taken by Jassim al-Mannai. The changes come as regional institutions are pushing for increased take-up of financing facilities to boost inter-Arab trade.
Al-Mannai, a Bahrain national, took over as the Abu Dhabi-based AMF’s chairman and director-general on 5 March. He was previously executive vice-president (project group) of the Kuwait-based Gulf Investment Corporation (GIC). Mannai joined GIC in 1984 from a senior post in Bahrain’s Finance & National Economy Ministry. He has also been a board member of Bahrain Petroleum Company (Bapco), The Arab Investment Company (TAIC) and the Bahrain-Saudi Aluminium Marketing Company (Balco).
In a 27 February statement, the AMF said it was owed outstanding loans worth $649 million. Its loan commitments are $334 million, equivalent to 55 per cent of paid-up capital.
Faquih oversaw the creation of the Arab Trade Finance Programme (ATFP), an institution based at the AMF, intended to boost inter-Arab trade.
The ATFP is looking to increase its operations, it said after a late- February board meeting which also formalised Al-Mannai’s appointment to head the programme. The ATFP has capacity to finance $1,000 million annually, with capital of $500 million. The ATFP said it had received applications for credits totalling $397 million since starting operations in early 1991. Of these, $263 million had been approved. In 1993, the ATFP received applications for credits worth $140 million and agreed $95 million.
The relatively low take-up of credits by all but a few member countries reflects the paucity of inter-Arab trade transactions. According to AMF data, inter-Arab exports fell to 7.2 per cent of total exports by the 21 AMF member countries in 1992, from 10 per cent in 1991. ‘The decline underscores the need for intensifying efforts to free inter-Arab trade and upgrade supporting services,’ the AMF said.
The call to use new financial instruments to boost inter-Arab trade has been taken up by the Kuwait-based Arab Investment Guarantee Corporation (AIGC). It is advocating the establishment of national export credit agencies (ECAs), to be backed by AIGC and the IDB. Only a few states now have ECAs, among them Morocco, Tunisia and Egypt, whose Export Credit Guarantee Company has entered into a co-operation agreement with France’s Coface.