Trade finance in the Arab region
The International Islamic Trade Finance Corporation (ITFC) works to enhance trade, trade cooperation and regional economic integration among member countries of the Organisation of Islamic Cooperation (OIC) through the financing of businesses and delivery of trade-related technical assistance.
As the trade-development arm of the Islamic Development Bank (IDB) Group, ITFC approved US$ 1.2 billion in trade financing to the Middle East and North Africa region in 2012. This funding enabled member countries to better cope with some of the unprecedented challenges facing the region. Since its establishment in 2008, ITFC has approved a total of US$ 14.7 billion in trade financing for its member countries.
ITFC also manages a trade cooperation and promotion programme among OIC member states that provides trade-related technical assistance to trade support institutions and small and medium-sized enterprises in four main business lines: trade promotion, trade facilitation, capacity development and development of strategic commodities.
The business model for the trade cooperation and promotion programme now takes a programme-based planning approach, as opposed to the previous event-based approach, to increase the field-level impacts of its interventions. This new approach allows us to better address trade-development challenges and mobilize financial resources for trade-related technical assistance.
The first successful example of such a programme-based approach is the Aid for Trade Initiative for Arab States, which is targeted at enabling the member countries of the League of Arab States to benefit from regional and international trade, and so achieve regional integration.
The initiative is a partnership of 22 Arab countries, regional economic organizations, international trade-related organizations and donors. The project document for the Aid-for-Trade Initiative was prepared through intensive consultation with stakeholders, after which ITFC took the lead in mobilizing resources and securing funds for its implementation.
The project will be directed by a board comprising donors, beneficiary countries, implementing agencies and partners, and the IDB Group. The United Nations Development Programme will act as partner in the project’s implementation and will coordinate the work of United Nations trade-cluster members, namely the International Trade Centre, the United Nations Conference on Trade and Development, the United Nations Industrial Development Organization, and the International Labour Organization.
The overarching objective of the initiative is to support inclusive economic growth with increased employment opportunities and greater competitiveness through trade policy reforms in the Arab States. The initiative is aimed at addressing challenges at the market access and business environment levels, the value chain level, the labour market level, as well as in the management and deployment of technical-assistance resources.
