Special Session on Islamic Social Finance World Humanitarian Summit

Bismillahirrahmanirrahim.

Good afternoon Excellencies, distinguished guests, ladies and gentlemen:

1. We are gathered here for a most serious purpose—to reflect; to rediscover; to reconcile; and to make every effort to meet the urgent humanitarian needs throughout the world. Let me begin by thanking all of you for coming to this Special Session this afternoon. It is providential that we are meeting here in Istanbul, a city at the confluence of the East and the West; and where modernity meets tradition. In fact, Napoleon Bonaparte once said that “If the whole world were one country, Istanbul would be its capital”.

2. When we look at the landscape of global humanitarian funding today, we find that the world’s five biggest donors provide two thirds of the money given by governments. This concentration of donors serves to highlight the imbalances in the present system. We have seen that insufficient funding can lead to greater global instability; and the prevention of the spread of instability is a global public good. Therefore, providing resources for producing stability should be a collective responsibility.

3. Social and faith-based financing, such as Islamic Social Finance, are some important additional sources of financing that can be better leveraged to reduce vulnerability. Every year, Muslims worldwide donate generously to Islamic Social Finance mechanisms to alleviate human suffering. We need to recognize the crucial difference that these emerging donors can make to humanitarian financing, and we believe in the importance of expanding their numbers while at the same time protecting the fundamental principles of humanitarian aid and good governance.

4. Given that the majority of people in need of aid are in Muslim countries, the role of Islamic Social Finance is particularly important. Innovative investments in humanitarian action, such as sukuk and social impact bonds, will not only lead to long-term social improvements, but also to long-term resilience and to adaptive capacity-building for communities at risk. Such investments will empower communities to recover more strongly from shocks as well as facilitate social and economic inclusion within their populations.

5. A good example is the award-winning Global Alliance for Vaccines and Immunisation Matching Fund, created by the International Finance Facility for Immunisation and supported by various Member States, the Bill Gates Foundation and the World Bank, which is a unique vaccine sukuk programme launched last year at the World Economic Forum in Davos. The inaugural sukuk raised US$500 million, which was one and a half times oversubscribed (65% of investors came from the Middle East, 18% from Asia and 17% from Europe). The sukuk structure made it possible for Islamic investment institutions to participate. This is a new way of mobilizing resources that can increase sustainable humanitarian financing, using capital market instruments to reach non-traditional donors and even ‘conscientious investors’.

6. Only by focusing the world’s attention on the rapidly growing numbers of people in desperate need will we be able to achieve the UN Sustainable Development Goals and truly ensure that ‘no one is left behind’.

7. If we aim to build resilience for equitable growth and achieve the aspirations of Agenda 2030 in the Sustainable Development Goals, then better approaches are needed to support those who have been truly left behind, caught in continual crises and recurrent disasters. Failure to find new solutions to build resilience—not only for countries and people in crisis, but also for those like Turkey here who bear the burden of hosting the displaced—would bring regression, not development. Currently, more than one quarter of the population of the Muslim world lives on less than one dollar and a quarter a day per person. We know that even as we sit here, more than 50% of under-developed countries face humanitarian crises. No longer can we afford to distinguish between development funding and humanitarian aid, as the boundaries have become blurred. Now is the time to explore innovative ways to finance crisis management and development programmes, the more so as crises are lasting longer and delaying development.

8. I am privileged to have been invited by Secretary-General Ban Ki-moon to serve as Co-Chair of the UN High-Level Panel on Humanitarian Financing. Together with my fellow panellists, we have, among others, advocated the recognition and use of Islamic financial solutions. Since the launch of our Report in Dubai last January, the Secretary-General has been eager for us to showcase at this Summit today innovative platforms that can be used for Islamic social financing mechanisms, leading to the mobilisation of additional financial resources for humanitarian assistance.

9. A high-level meeting on humanitarian-development collaboration in the global displacement crisis was convened by the Secretary-General in March of this year to look into ways for the Multilateral Development Banks, the MDBs, to work together with the various humanitarian agencies. That meeting was exceptional in that, for the first time, it brought the various MDBs into the discussions on humanitarian-development linkages, while also providing an opportunity to mobilize support for implementing the reports of the Secretary-General and our High-Level Panel.

10. As a follow up, a Joint Taskforce was organized for a meeting in April at Worcester College, Oxford. The objective was to champion the ‘Islamic Social Finance’ initiative called for by the Secretary-General under the Humanitarian Financing Core Commitments 2, 4 and 5 announced at the Member States Briefing last month.[1] Gathering the representatives of the relevant institutional stakeholders there was crucial for firming up concrete commitments ahead of our Special Session today. The Oxford meeting marked a significant milestone, bringing together the Islamic Development Bank and the World Bank to agree in principle to work jointly to unleash the power of Islamic Social Finance.

11. We are all too aware that the gap in humanitarian funding is an alarming and growing one. The United Nations still fell short of USD7.5 billion last year. Every member of the High-Level Panel believes that in today’s global economy of USD78 trillion, it is unacceptable that anybody should die or live without dignity because we cannot find the resources required to help people in need.

12. As we shall hear shortly from the various institutional stakeholders, discussions on our collective commitments are already on-going.

13. We look to the Islamic Development Bank for leadership in this initiative. We welcome the prospect of the World Bank working closely with the IDB on this. We also urge that pilot projects among the humanitarian agencies be accelerated, and we note that Maybank Islamic and the Norwegian Refugee Council have already started to move ahead in this noble venture. Together with the OIC Member States, along with other nations such as Luxembourg represented here, we all need, collectively, to turn moral leadership into action.

14. These important initiatives will also enable non-traditional donors, such as the private sector and faith-based organizations, to channel funds to local and regional bodies that form the frontline of humanitarian response, yet which are often unable to access directly the financial support they urgently require.

15. Providing for people in need is not only morally right, but it is also an investment in global stability to which we all can contribute. Our different faiths teach us the importance of compassion and of one common shared humanity. Even the current work of secular humanitarian organisations is often inspired by the ethos of religion and spirituality, which in turn has inspired a culture of sustainable development.

16. When I was in school, I remember being taught that in the 15th and 16th centuries, Venice is where the Eastern world met the Western world. Then when I was a young man in Istanbul, I remember being told that in the 20th century, Istanbul is where East meets West. Well, here I am in Istanbul in this century. And I can tell you now that Islamic Social Finance is where East meets West in the 21st century!

Thank you.

  1. Core Commitment 2: to further commitments by donors and relevant financial institutions to support the development of Islamic Social Finance instruments focused on prevention, resilience building for conflict-affected and disaster-affected countries, as well as protracted crises.Core Commitment 4: to support innovations for mobilising finance such as the issuance of an inaugural humanitarian sukuk (social impact bonds) programme which would pave the way towards sustainable humanitarian financing, using capital market instruments to reach non-traditional donors.Core Commitment 5: to enable funding from non-traditional sources such as private individuals and faith-based funds to play a significant role in making funds available to local organisations that form the frontline of humanitarian response, yet which are often unable to directly access funds.
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