Enhancing Intra-Trade in OIC Member Countries Through T-SDRs
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The OIC intra-trade reached 17% in 2012 and the member countries have committed to increase it to 20% by 2015. The 5th OIC Consultative Group Meeting on enhancing OIC intra-trade recommended the ...
The OIC intra-trade reached 17% in 2012 and the member countries have committed to increase it to 20% by 2015. The 5th OIC Consultative Group Meeting on enhancing OIC intra-trade recommended the establishment of Trade Finance Support Schemes, as one of the driving factors, to accelerate the dynamic of the OIC intra-trade. Meanwhile, the United Nations World Economic and Social Survey (2012) considered that issuing new SDRs constitutes one of the solutions for the international community to mobilize additional resources for Development Finance. In this paper, we suggest the creation of Trade-based Special Drawing Rights (T-SDRs) among the OIC member countries to be issued by a dedicated regional financial institution on a regular frequency and according to a special mechanism. We discuss the allocation mechanism and its practical implementation among which the option to assign the role of issuance and clearing house to the Islamic Development Bank.
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