Mahathir was instrumental in formulating Malaysia's Vision 2020.

Meanwhile, Malaysian Prime Minister Abdullah Ahmad Badawi said the Muslim world needs to band together to fund its own massive development needs.

Muslim countries should pool their collection of zakah and other assets under a global fund that invests under Islamic law, which forbids interest, he added, during his speech at the Board of Governors of IDB at the board's annual meeting at the Putrajaya International Convention Center Thursday.

Since 28 member countries have some form of Islamic banking, which forbids interest, the IDB should develop a global Islamic financial architecture to ensure the sector's growth, he said while opening the two-day annual event.

"For infrastructure financing alone, it is estimated that the IDB member countries would require about US$741 billion (euro611 billion) over the next 10 years," Abdullah said, according to Bernama.

Badawi has proposed an Organization of Islamic Conference Infrastructure Bond Fund (IBF) and a waqf (endowment) fund known as Universal Musyarakah Fund (UMF) to pool financial resources from the Muslim world, Bernama said.

He said that proposing the two funds is important to uplift the economic status of the Ummah or Community of Muslims.

He added that the IDB will assist members that were not able to tap the international markets to raise long-term funding.

He suggested that the central banks of OIC members contribute towards the IBF where it could in turn be used for infrastructure projects in OIC member countries.

Abdullah added that the 55-member IDB should look beyond the market to raise money as the financial needs were large, citing that its member countries required about US$741 billion over the next 10 years for infrastructure financing alone.

"Another approach is for OIC countries to revitalise the role of zakah and waqf institutions in Muslim societies to address the issue of poverty and economic development in Muslim countries."

Abdullah said OIC members could consider internationalizing the zakah and waqf to alleviate suffering and to empower the Ummah.

He added the proposed UMF, which could be modeled as a development aid fund, would enable the pooling of reserves of Muslim countries for investment in Islamic Financial market instruments.

The two proposals from the prime minister, who is also the chairman of OIC, were contained as part of three themes proposed by him for fostering economic development and strengthening the Ummah.

"First, co-operation through trade and capital flows. Second, Islamic finance as a competitive advantage and third, human capital development," he said.

Lamenting that intra-OIC trade only amounted to 12 percent, Abdullah said member countries should promote tariff reduction, free trade arrangements (FTA), bilateral/multilateral payment arrangements, as well as sourcing goods and services from among members as they work towards an Islamic common market.

Abdullah also said that OIC countries could start trading among themselves without using other countries as intermediaries.

During his address, Badawi also announced the appointment of Former Prime Minister Dr Mahathir Mohamad as chairman of Islamic Development Bank's 1440H Vision Commission to formulate the Muslim world's Vision 2020.

He said the 1440H Vision Commission was established by IDB to formulate the vision that would guide the group to embark upon strategic initiatives and to bring prosperity and development to the Muslim World.

"It will embrace the economic, governance and social agenda as well as future development needs," he said.

Abdullah said Malaysia, which is pursuing its own Vision 2020 of becoming a developed nation in about 15 years from now, would support the commission in all its activities.

Mahathir, who retired as Prime Minister in 2003, was instrumental in formulating Malaysia's Vision 2020.

Badawi said the commission would revamp the 30-year-old IDB and chart strategies to eradicate poverty and illiteracy.

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