Middle East Infrastructure Development Bank

Middle East Infrastructure Development Bank

A report recently mentioned that infrastructure investments in the region would exceed $105 billion. This would translate any figure between 5% to 10% of the respective country’s GDP. We all know the importance of infrastructure investment- it can easily create jobs, future economic growth and plug in gaps. This is where an infrastructure investment bank comes into play. While there have been many institutions which were started with similar intentions, there must be a renewed focus on improving the existing infrastructure to supplement the implementation of the UAE Vision 2021, Saudi Vision 2030 plan and Qatar National Vision 2030.

The primary aim of this bank must be to develop local currency and SME financial markets. For a developing economic region such as the GCC, the Middle East Development Bank would attract investors and entrepreneurs, develop human resources and industries, propagate formation of required technical services and in short accelerate the economic development of the region. It must also be able to fund infrastructure projects which cross borders to promote regional economic integration. It can also help in reducing foreign debt of all the countries as well as finance the development of housing sector.

 Apart from carrying out these functions, this bank must also guide Middle East countries on financing and promoting private participation in infrastructure (as well as generally in private sector as well). They can also help the governments to implement these policies and offer training to commercial banks for regulation and regional development. The Middle East Development Bank can also serve as an ancillary support to Western institutions such as World Bank while cofunctioning with the ‘New Development Bank’.

GCC countries’ development plans would make the world acknowledge the economic powerhouse the region is. But, would the large-scale projects required for implementing the plan be undertaken when commercial banks refuse to associate such projects (as they require both long-term finance and long maturation periods)? Only a development bank can carry these functions. Hence, for the goodwill of the region, a Middle East Infrastructure Development Bank must be started as soon as possible.