Dhaka is set to become a regional hub of the Islamic Development Bank (IDB) by September next, ending months of speculation.
Sources at the Economic Relations Division (ERD) and the IDB told the FE that the Jeddah-based multilateral development partner has sent a written proposal to the Government of Bangladesh (GoB) in this connection.
In the letter, the IDB has expressed its willingness to launch its regional office in Dhaka by September.
They also said the move is taken as part of the IDB's ongoing process of decentralisation across the world.
Prime Minister Sheikh Hasina is expected to formally inaugurate the regional head office, a senior official of the ERD told the FE.
The Islamic multilateral development financier is currently represented in Bangladesh by a field representative office.
However, it has long been observed that the field office needs upgradation in the context of the IDB's expanding portfolio in the country.
In late 2015, the IDB and the GoB signed a deal for setting up a country gateway office in Dhaka.
However, a meeting of the IDB Board of Governors took place in Jeddah last year.
In the meeting, IDB President Dr. Bandar M H Hajjar revealed his plan to set up its regional headquarter (HQ) in Dhaka to Finance Minister A M A Muhith.
Although the plan got stalled afterwards, the IDB has recently sent the letter to the GoB, asking for a timeslot of the Prime Minister in September.
"The government has already sent its response to the organisation. We are interested to see inauguration of its regional hub in the second week of September," said an ERD official.
"Since assuming office, Mr. Hajjar has moved for growing decentralisation of the IDB activities," said a high official from the organisation.
"As part of the decentralisation drive, the IDB is planning to establish 11 regional hubs across the world, and Dhaka will be one of them," added the official.
The insiders also observed that establishing the regional hub would give a major impetus to the IDB activities in the country as well as help quicken its decision-making process.
"Currently, the decisions regarding the IDB's local activities require final nod from its Jeddah headquarter," said an insider.
"However, once a regional headquarter is established here, it would make any decision-making process faster and easier," he added.
Once operationalised, Dhaka would be the regional hub of three IDB member countries -- Bangladesh, the Maldives and Afghanistan -- as well as a number of non-member countries like India and Myanmar.
The new IDB office would be headed by a regional hub manager.
"While we are quite confident about the inclusion of the Maldives, we are still waiting for any decision regarding Afghanistan," a senior official said.
"Setting up a regional office would certainly enhance the profile of Bangladesh among the IDB member countries," ERD Additional Secretary Mohammad Shamsul Alam told the FE.
"This would also hopefully invigorate the IDB activities in Bangladesh," added Mr. Alam, who heads the ERD Middle-East Wing.
The IDB was founded in 1973 at the first Organisation of the Islamic Conference (now called the Organisation of Islamic Cooperation or OIC) under the auspices of Saudi Arabia.
The IDB began its activities in 1975. Currently, it has 56 shareholding member states.
Bangladesh was the fourth largest recipient of the IDB financing in 2017, receiving funds worth US$ 900.6 million. The amount was 9.2 per cent of the total IDB financing that year.
