The Asian Infrastructure Investment Bank (AIIB), conceived and hosted by China, is essentially a multilateral development bank that is driven solely by the “quality of projects and not politics”, according to its Vice-President, Danny Alexander.
His comments come against the backdrop of India’s strategic concerns regarding the China-Pakistan Economic Corridor (CPEC) that covers areas including Pakistan-occupied-Kashmir. CPEC is the so-called ‘flagship’ project of China’s One-Belt-One-Road (OBOR) initiative, aimed at developing infrastructure in more than 60 countries. OBOR is among those that will get AIIB funding.
“We have very strong governance (framework) within the Bank,” Mr. Alexander told The Hindu on the sidelines of an event organised by the industry body FICCI. “(Adhering to) that is very important in the decisions we take. We have a strong executive team led by our President Jin Liqun. If you look at our Articles of Agreement, there are very clear processes regarding appointing our Board of Governors and Board of Directors. We are a very transparent organisation as well,” he said. He added that all these aspects act as a firewall to help AIIB focus on projects and avoid politics.
India’s voting share
India is an influential member of the AIIB as it has the second-largest voting share and percentage of shares (next only to China) in the multilateral institution that has 57 member countries. Pointing out that India, with a higher growth rate than most economies and with huge infrastructure financing requirements, is an important country for AIIB, Mr. Alexander, however, said the Bank did not have a specific limit on exposure to any country including India. India had a lot of potential and, therefore, the Bank did not want to be “hemmed in” by any such limits, he added.
Asked if the Bank would be flexible in considering funding projects such as coal-fired power plants that are of importance to developing countries such as India in meeting their ‘development challenges’ including energy needs, Mr. Alexander referred to the AIIB’s ‘environmental and social framework’ and said it was consistent with the Sustainable Development Goals (an initiative by the United Nations). Among the 17 SDGs is ‘taking urgent action to combat climate change and its impacts’.
Mr. Alexander said: “The important thing is every country has identified its own transition (to a green economy). In the AIIB, we have to start where the countries are. In different places, that transition has different manifestations. We have to work with countries as they make the transition to be more sustainable.” He said, for instance, the AIIB was funding a gas-based power plant project in Myanmar as it was very important for that country, adding that, “In the end, we are driven by our members and the projects that come through, and we will consider each of those on merit.” Multilateral bodies such as the World Bank had said they would maintain curbs on lending to projects that are not considered “environment-friendly.”
On whether the U.S. President-elect Donald Trump’s promises made during the Presidential campaign to label China a ‘currency manipulator’ and the likelihood of a U.S.-China trade war would hamper AIIB’s operations directly or indirectly, Mr. Alexander said: “The U.S. is not a member of the AIIB. We have 57 members and many more countries want to join. If the U.S. wishes to join the bank, their application will also be welcome.” He added: “We have a very clear mandate and support from our members and we intend to carry on doing that. We don’t see any particular problems (due to Mr. Trump).” Mr. Alexander said the Bank’s priority areas in Asia are to help develop sustainable infrastructure, improve transport and energy connectivity and mobilise private sector capital into infrastructure.
