The Islamic Development Bank and the Bill & Melinda Gates Foundation have teamed up to launch a new $2.5 billion sharia-compliant fund targeting extreme poverty in the Middle East. By partnering with the world’s richest charitable institution, the IDB hopes to successfully combat poverty in the Islamic world.
Although the Middle East is home to some of the richest countries worldwide, it also includes some of the world’s poorest, such as Burkina Faso and Chad. Additionally, some countries show a combination of extreme wealth and poverty, such as Egypt and Indonesia. Others are known simply for their extreme violence, like Yemen and Syria.
Without the assistance of a strong partner, regions like these would normally have a much harder time bringing in grants and skills into their territories. Key players hope that the various connections established through the partnership will prove to be even more effective than the partnership itself.
Hassan Al Damluji, head of Middle East Relations at the Bill & Melinda Gates Foundation, recently discussed the Lives and Livelihoods Fund in an interview, stating, “We are engaging Gulf donors who will be around and are sustainable, unlike the Foundation, which is a family fortune and is thus finite.”
Al Damluji went on to explain that one of the key features of the fund is its encouragement of investment from the poor countries themselves. Another essential working part of the fund is that it gives aid linked to the loans taken by recipient countries, so these countries are held accountable for their own development.
The plan is for the fund to finance projects in four different areas: agriculture and food security, primary health care, infectious disease control and eradication, and basic infrastructure. Al Damluji explained that all of these areas represent major drivers of inequality across the globe.
The overarching goal is to maximize the beneficiaries of this partnership, regardless of race, country or religion. With the additional long-term goal of sustainability in mind, the fund will be strategically housed in and administered by the IDB.
So far, the IDB has provided $2 billion, and a remaining $500 million will come from donors over the next five years in the form of grants. Both partners will work together to determine which projects deserve priority. The partners will meet twice annually in order to ensure cooperation and coordination.
The reasoning behind the choice of the four main project areas is that over time, effects like improved health and increased farmer productivity will work to boost economies. The key to understanding the way the new fund will work is to operate from a big picture perspective and to take into account its long-term consequences.
This will be the first major fund of its kind to actually be based in the Middle East. Al Damluji boasted that the fund will also have a bank of shareholders that are not OECD countries and not traditional donors.
Both the IDB and the Bill & Melinda Gates Foundation understand the necessity of a well-functioning partnership in order to accomplish real change in the Middle East. The new partnership is more important than the fund itself and cooperation is absolutely necessary.
Additionally, both partners understand that two minds are better than one—especially when dealing with such a deeply rooted, complex problem. Together, the IDB and the Bill & Melinda Gates Foundation have raised the bar in the global anti-poverty fight.
– Sarah Bernard