AIIB knows needs of developing world better, say its officials

Chinese Finance Minister Lou Jiwei attends the opening ceremony of the first annual meeting of Asian Infrastructure Investment Bank in Beijing, China, on June 25.
Chinese Finance Minister Lou Jiwei attends the opening ceremony of the first annual meeting of Asian Infrastructure Investment Bank in Beijing, China, on June 25. PHOTO: REUTERS

BEIJING • The China-led Asian Infrastructure Investment Bank (AIIB) will be different from institutions like the World Bank because it has a greater understanding of the developing world's needs, bank officials said yesterday at its inaugural annual meeting.

Chinese President Xi Jinping proposed the bank two years ago and it began operations in January, with 57 founding member countries and US$100 billion (S$135 billion) in committed capital, which it plans to invest in projects across the region.

The AIIB, which intends to invest US$1.2 billion this year, has said it is aiming to meet international standards of governance, though some members say there is still work to be done.

Speaking on the final day of the bank's first annual meeting, Finance Minister Lou Jiwei said the AIIB needs to establish its niche.

"The AIIB needs to establish its comparative advantage relative to existing multilateral development banks like the World Bank," Mr Lou said. "Compared with the Asian Development Bank, World Bank and other multilateral development banks, the AIIB's advantage lies in its keener understanding of the successful experience and lessons of developing countries' years of nation building."

The AIIB's board approved its first four deals worth US$509 million on Friday, with three projects co-financed with the World Bank, the Asian Development Bank, the United Kingdom Department for International Development and the European Bank for Reconstruction and Development.

The co-financed projects are a slum renovation in Indonesia and highway construction in Pakistan and Tajikistan. A power grid upgrade project in Bangladesh will be solely financed by AIIB.

Although the new bank was China's idea, it is intended to operate as an international bank dedicated to improving the basic structures and facilities needed to stimulate development across Asia, AIIB president Jin Liqun said at a news conference on Saturday.

Unlike the World Bank and the Asian Development Bank, the Asian Infrastructure Investment Bank places less emphasis on the reduction of poverty, he said.

The bank "was born with the birthmark of China, but its upbringing is international", Mr Jin said.

The new bank is being watched closely. The United States refused to join when it was offered membership in 2014, saying it was uncertain how the bank would measure up on matters of environmental protection, human rights and anti-corruption measures long promoted by Western governments and institutions. Japan has also not sought membership in the bank.

Two dozen countries have expressed interest in joining the bank, and they sent observers to the two-day meeting, Mr Jin said.

The new members would come from Eastern Europe, Latin America and Africa, and could join as early as next year.

REUTERS, NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on June 27, 2016, with the headline 'AIIB knows needs of developing world better, say its officials'. Print Edition | Subscribe