Hundred-member milestone is a demonstration of AIIB appeal

Note:The following article is taken from the Chinese-language "Commentaries on International Affairs".

The Asian Infrastructure Investment Bank (AIIB) on Saturday approved the membership of Benin, Djibouti and Rwanda during its fourth annual meeting, which was held in Luxembourg. This brings the AIIB's total approved membership to 100 from 57 since it was launched three years ago.

View of the headquarters of the Asian Infrastructure Investment Bank (AIIB) in Beijing, China, 11 December 2017. [File photo: IC]

Against the backdrop of global economic uncertainties, the expansion of AIIB’s membership shows it has growing international recognition for its efforts to promote infrastructure development and global economic governance, as well as multilateralism and inclusiveness.

Over the past three years, the AIIB has created more and more opportunities for Asian and global economies by strengthening infrastructure development. It has provided 8.5 billion U.S. dollars in financing for 46 projects in 18 countries, ranging from transportation and energy to telecommunications and urban development. Most of the projects are based in Asia, where there is an estimated funding gap of 1.4 trillion U.S. dollars a year for new infrastructure projects. This gap ranges from 68 billion to 108 billion U.S. dollars in Africa. It could therefore be said that by investing in infrastructure in Asia and Africa via the AIIB, developed countries are sharing the opportunities of economic growth in the two continents.

International financial institutions, including the World Bank and the International Monetary Fund, haven’t evolved in a way that reflects the rise of emerging markets and developing economies. Meanwhile, the AIIB is able to improve global economic governance in an impartial and viable manner, as developing countries are the majority shareholders and have a major influence over the bank. That said, the AIIB will not replace other multilateral development banks; rather it is a complement to existing international institutions. For example, Indonesia’s national slum upgrading project is based on cooperation between the AIIB and the World Bank.

The AIIB is a multilateral development agency with 21st-century corporate governance. It upholds international standards in terms of its governance structure, policy standards, and human resources management. It also endeavors to be the cleanest agency of kind, by adhering to stringent regulations concerning project financing and procurement. This is why the AIIB won a top rating from the three big credit rating agencies Standard & Poor's, Moody's, and Fitch Group in 2017 and 2018.

The Asian Infrastructure Investment Bank is not only a platform for international financial cooperation, but also a public good provided by China to the international community. China has been a firm supporter of AIIB’s development since its inception. It promised that, apart from regularly injecting equity capital, China would also provide 50 million U.S. dollars for the bank’s special fund to support infrastructure projects in less-developed countries. Over the past three years, China has honored its commitments to the bank and its members, and has neither interfered with the routine work of AIIB executives nor played a dominant role in the bank’s decision-making processes.

The AIIB’s expanding membership reflects the recognition of its members that China is, as AIIB Vice President Joachim von Amsberg has said, a responsible major shareholder. And there’s every reason to believe that a bigger and stronger AIIB will make new contributions to world economic governance as it becomes an increasingly important supporter of global development.