The China-led Asian Infrastructure Investment Bank (AIIB) was formally opened for business, signaling the steady revamp of the global financial architecture, which will also soon incorporate the New Development Bank of the Brazil-Russia-India-China-South Africa (BRICS) grouping.
- Analysts say that the AIIB is likely to lend anywhere between $10 billion-$15 billion a year during the first five or six years of its existence.
- India, which is the second largest stake-holder in the China-backed Asian Infrastructure Investment Bank, has failed to secure a guarantee for the institution’s vice presidency even as it asserted that Beijing has no veto rights despite having a say in its functioning.
- AIIB decided to hire meritorious candidates for such posts, instead of allotting it to countries based on shareholding.
- The AIIB is expected to open a new channel of funding for the Global South, which was so far dependent on the western backed International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB), in which Japan plays a pre-eminent role.
- Observers say that the new lender will focus on infrastructure development in Asia-a move that is likely to support the Eurasian connectivity initiative under the China-led Belt and Road framework.
- The formal opening on Saturday also reinforced a major geopolitical shift — of a closer structural alignment along the financial track of China with Europe-a traditional ally of the United States.
- The bank will focus on digital infrastructure including fixed broadband networks, cross border and undersea fiber optic telecommunication cables, wireless sensor networks, satellite services, new generation mobile telecommunication networks, cloud computing and big data platforms.
The Asian Infrastructure Investment Bank (AIIB)
- The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank (MDB) conceived for the 21st century.
- Through a participatory process, its founding members are developing its core philosophy, principles, policies, value system and operating platform.
- The Bank’s foundation is built on the lessons of experience of existing MDBs and the private sector.
- Its modus operandi will be lean, clean and green: lean, with a small efficient management team and highly skilled staff; clean, an ethical organization with zero tolerance for corruption; and green, an institution built on respect for the environment.
- The AIIB will put in place strong policies on governance, accountability, financial, procurement and environmental and social frameworks.
- The AIIB, a modern knowledge-based institution, will focus on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, etc.
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