Amidst the Spring Meetings of the World Bank and IMF 2024 in Washington D.C., United States, Finance Minister Sri Mulyani Indrawati took the opportunity to meet with International Finance Corporation (IFC) Managing Director Makhtar Diop.
Sri Mulyani emphasized that the IFC serves as an extension of the World Bank, playing a crucial role in combating extreme poverty in developing countries through collaborations with the private sector.
“Amidst my busy schedule in Washington, D.C., I had the chance to meet with its Managing Director, @diop_ifc. This marks our umpteenth meeting,” stated Sri Mulyani as quoted from her personal Instagram account @smindrawati, on Monday (22/4/2024).
The finance minister disclosed that their discussions covered various topics ranging from the current global and domestic economic landscapes to existing and forthcoming collaborations between the Indonesian government and the IFC.
Sri Mulyani conveyed to Diop that the challenges in the global economy are constantly evolving, characterized by various uncertainties. Moreover, 2024 being an election year with more than 70 countries holding their democratic processes will inevitably lead to policy changes worldwide.
Regarding domestic conditions, both parties concurred that Indonesia’s fiscal position remains robust. This is attributed to Indonesia’s sustained revenue growth and prudent expenditure management.
Furthermore, Sri Mulyani welcomed the IFC’s initiative to expand its operations in Indonesia, particularly its commitment to safeguarding the welfare of vulnerable populations. To date, the IFC’s investments in Indonesia have reached USD 9.6 billion.
“May this collaboration continue to provide solutions to the challenges of our time. Thank you for the fruitful discussion, Diop..!,” concluded Sri Mulyani.
Previously, Finance Minister Sri Mulyani Indrawati urged for the strengthening of the Islamic Development Bank’s (IsDB) role, emphasizing the importance of multilateral banks in assisting many countries.
This request was conveyed, among others, to the Minister of Finance of the Kingdom of Saudi Arabia, Mohammed bin Abdullah Al-Jadaan.
“The role of multilateral development banks like IsDB is increasingly crucial and is expected to bridge gaps and financing needs for countries in need,” stated Sri Mulyani in Washington DC, as quoted on Saturday (20/4/2024).
As the IsDB Annual Meeting 2024 in Riyadh approaches, marking the institution’s 50th anniversary, the Finance Minister highlighted the need for IsDB to undertake reforms. These reforms aim to strengthen its role in supporting member countries in facing current global challenges.
“IsDB also needs to make its operations more effective by streamlining some financing procedures and increasing the involvement of member countries in directing IsDB policies,” added Finance Minister Sri Mulyani.
As the third-largest member country, Sri Mulyani hopes that IsDB will improve its governance, procedures, capacity, and financing instruments in line with the theme of the upcoming meeting: “Cherishing our Past Charting our Future: Originality, Solidarity, and Prosperity.”
Previously, Indonesia officially became the third-largest shareholder in the Islamic Development Bank (IsDB), after Saudi Arabia and Libya. The IsDB Board of Governors unanimously approved Indonesia’s proposal to increase its shares at the 48th Annual Meeting of the IsDB (10-13 May 2023) in Jeddah, Saudi Arabia.
Finance Minister Sri Mulyani Indrawati, present at the occasion, stated that with the increased shares in the Islamic Development Bank, Indonesia would gain various benefits, both strategically and economically.
“From enhancing Indonesia’s bargaining position in IsDB to increasing the potential IsDB financing up to 3.5-4 times larger,” said Sri Mulyani via her Instagram account @smindrawati, on Sunday (14/5/2023).
“I hope that with this increase in shares, cooperation between Indonesia and IsDB will strengthen further and bring prosperity to all,” she added.
Sri Mulyani recounted that Indonesia’s relationship with the Islamic Development Bank has been long-standing. Indonesia’s membership in IsDB dates back to August 12, 1974, even being one of its founding members.
Before holding the third-largest share, Sri Mulyani noted that Indonesia was the 12th largest shareholder with a total capital contribution of USD 1,511 million, or 2.25 percent of IsDB’s total placed capital.
Furthermore, from its inception until 2022, the IsDB Group has approved financing for Indonesia totaling USD 6.3 billion.
Previously, Sri Mulyani also presented strategies for a specific share increase, known as the Special Capital Increase (SCI). This share increase would position Indonesia as the third-largest shareholder after Saudi Arabia and Libya, with a share increase of 8.43 percent.
“This post-SCI will result in dilution for all shareholders. Thus, Indonesia’s final shareholding will be 7.94 percent. The IsDB Board of Governors approved this SCI at the IsDB Annual Meetings on May 12, 2023,” explained Sri Mulyani.
