COMCEC Trade Outlook 2016
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Meeting, held in March 1986 in Amman, Jordan, approved the Longer-Term Trade Financing
Scheme. The title of the Scheme was later changed to Export Financing Scheme (EFS) and it
became operational in 1988.
The EFS aims at promoting exports of non-conventional commodities by providing the necessary
short and long-term funds. The repayment periods under the Scheme were originally between 6
and 60 months for the intra-OIC export. This period has now been extended to ten years for
capital goods, such as ships, machinery etc. Each Member State participating in the EFS had one
or more national agencies for the Scheme. The role of the national agencies was to coordinate the
promotion of the EFS in their countries. Since its inception in 1988, cumulatively over an amount
of USD 3 billion of approvals were made under the Scheme.
After the establishment of the International Islamic Trade Finance Corporation (ITFC), in 2005,
all trade financing activities of the IDB, including the EFS, were brought under the ITFC. The ITFC
commenced business at the beginning of 2008. Most commonmodes of trade financing provided
by the ITFC are murabaha, installment sale and istisna’a.
Since its establishment, the ITFC has increased the volume of operations and business portfolio.
In 2014 (1435H) its trade financing approvals reached USD 5.15 Billion (ITFC 2015). In order to
have greater impact, it also gives more emphasis on providing finance to Least Developed
Member Countries (LDMC’s), SMEs and strategic commodities produced in the Member States
such as oil, cotton, wheat etc.
The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is a
subsidiary organ of the IDB. It was established in 1994 with an authorized capital of ID 100
million (about USD 127 million) and become operational in 1995. ICIEC has 40 Member
Countries. The objective of the ICIEC is to expand the scope of trade transactions and the flow of
investments among Member Countries of the OIC.
5.2. THE WAY FORWARD: THE COMCEC STRATEGY FOR
ENHANCING INTRA-OIC TRADE
The Fourth Extra-ordinary Islamic Summit Conference held on August 14-15, 2012 adopted the
COMCEC Strategy. The Strategy defines six cooperation areas and trade is one of them.
Enhancing Mobility, Strengthening Solidarity and Improving Governance are the three
principles of the Strategy.
The Strategy defines the strategic objective of cooperation
in the area of trade as “Expansion of Trade among the
Member States”. In order to reach the strategic objective,
the Strategy defines four output areas, namely trade
liberalization, trade facilitation, trade financing and trade
promotion. For each output areas, the Strategy defines the
COMCEC’s role as well as the expected outcomes. As it was
discussed earlier, many OIC Member States face obstacles in the output areas defined in the
Strategy. Through the new implementation instruments, the Strategy aims at contributing to the
improvement of the current situation towards increasing intra-OIC trade. To reach these
“COMCEC Strategy
gives special emphasis
to improving trade
environment”