JEDDAH: The biggest obstacle facing many Islamic Development Bank member countries is not access to capital but weak implementation capacity that prevents development plans from becoming bankable projects, IsDB Group Chairman Mohammed Al-Jasser said.
Speaking to Arab News after securing a new five-year mandate, Al-Jasser said governments across the lender’s 57 member states often have clear development priorities but struggle to translate them into deliverable outcomes.
“If I had to identify one overarching structural constraint, it would be the gap between development ambition and implementation capacity,” he said.
He added that many member countries have clear priorities, but they still face constraints in project preparation, institutional coordination, access to affordable financing, and the ability to turn strategies into bankable, scalable results.
The comments come as the Jeddah-based multilateral lender seeks to expand its development role amid rising geopolitical tensions, climate pressures and growing financing needs across emerging economies.
Commenting on the significance of his re-election, Al-Jasser said: “This renewed mandate signals continuity of purpose, but also a clear expectation to scale delivery, deepen partnerships, and help member countries navigate a far more volatile global environment.”
Over the next five years, the bank will focus on strengthening resilience, advancing regional integration, mobilizing innovative and concessional financing, and accelerating development outcomes, according to Al-Jasser.
He further noted that, under its new Strategic Framework 2026-2035 and corporate strategies covering 2026-2030, the AAA-rated institution is seeking to position itself beyond its traditional financing role.
“We are positioning the group not only as a financier, but as a platform for partnership, knowledge, and implementation across our 57 member countries,” Al-Jasser said.
Al-Jasser declined to identify countries likely to receive the largest increase in financing over the next year, saying allocations are based on development needs, implementation readiness and measurable impact.
Instead, financing decisions are increasingly linked to resilience, regional integration, food security, climate adaptation and private-sector-led growth.
“What is already visible is a stronger and more structured model of engagement, with active member country strategies increasing from 4 in 2020 to 26 today, allowing us to align financing more effectively with national priorities and delivery capacity,” he said.
The chairman said the IsDB Group’s annual meetings in Baku from June 16-19 helped strengthen coordination among governments, development institutions and private-sector stakeholders around co-financing, connectivity, climate resilience and human development.
He added that the meetings also reinforced Azerbaijan’s role as a strategic partner and convening anchor. “More broadly, the meetings strengthened momentum behind partnership platforms, the newly established concessional fund, sustainable sukuk, and co-financing arrangements that can crowd in both public and private capital at greater scale,” he said.
Despite broad consensus on its benefits, regional integration across many IsDB member countries continues to advance more slowly than expected, according to Al-Jasser.
“In practice, the biggest obstacles tend to be fragmented logistics networks, financing constraints, regulatory misalignment, weak project preparation, and at times geopolitical uncertainty that raises transaction costs and delays implementation,” he said.
He added: “That is precisely why the IsDB Group sees regional integration as a practical agenda rather than a slogan: it requires sustained financing, policy coordination, technical support, and trust-building among countries.”
Infrastructure and food security
Al-Jasser defended the bank’s growing focus on cross-border infrastructure, energy resilience and sustainable agriculture, describing them as critical pillars of long-term development.
“I believe the strategy is directionally right, because these sectors sit at the heart of resilience, competitiveness, and long-term prosperity,” he said.
The chairman, who holds a Ph.D. in economics, said infrastructure improves connectivity and market access, while investments in energy and agriculture strengthen economic stability and food security.
“In Azerbaijan alone, the portfolio includes $495 million in energy, $265.2 million in water and urban services, and $219.3 million in agriculture, which illustrates how these sectors are already being treated as foundational to development impact,” he said.
Conflict adds pressure
Regional conflicts have complicated development planning by disrupting trade, increasing financing pressures and shifting resources toward stabilization efforts, Al-Jasser said.
He said the bank has responded by adapting delivery models and expanding support for resilience and vulnerable populations.
“Any easing of conflict is welcome because it can reopen space for implementation, recovery, and reconstruction, but our approach remains cautious and context-specific,” he said.
“Sustainable development requires stability, yet institutions like ours must remain engaged both during periods of stress and in the transition toward recovery.”
Al-Jasser said the bank’s focus on financial innovation is increasingly centered on instruments that improve delivery rather than financial engineering alone.
He cited blended finance, sustainable sukuk, the concessional fund and partnership platforms such as the Lives and Livelihoods Fund as examples.
“By contrast, any instrument remains theoretical if it is not embedded in a clear implementation model, country demand, and institutional capacity. Our approach is therefore to focus on financial innovation that changes outcomes on the ground, not simply on structures that look sophisticated on paper,” he told Arab News.
Lessons from Saudi Arabia
Al-Jasser said Saudi Arabia's economic transformation offers lessons for other developing countries, particularly in long-term planning, institutional discipline and private-sector development.
“Saudi Arabia’s transformation shows the importance of long-term vision, institutional discipline, economic diversification, investment in human capital, and creating a stronger enabling environment for the private sector,” he said.
Other IsDB member countries, he added, can draw value from that experience by applying these principles in ways that fit their own institutions, demographics, and economic structures.
“The broader lesson is that reform works best when it is sequenced well, nationally owned, and supported by financing, capacity, and implementation discipline,” he stressed.
Looking ahead, Al-Jasser said mounting challenges ranging from debt and climate change to food security and conflict will require greater international cooperation.
“This is a moment when cooperation matters more than ever,” he said.
“The IsDB Group remains committed to being not just a financier, but a trusted development partner that helps countries mobilize resources, strengthen resilience, and build a more inclusive and sustainable future,” he concluded.
