It's official! China-led AIIB established
What is widely regarded as a rival to the World Bank and other global bodies, the Asian Infrastructure Investment Bank (AIIB) was formally set up on Friday and it is expected to begin operations early next year. China’s Ministry of Foreign Affairs on Friday confirmed that 17 funding members with initial capital of 50.1% of the total share have deposited the instruments of ratification and the bank is likely to commence operations early next year. “The articles of agreement of the Asian Infrastructure Investment Bank, dated June 29, 2015, entered into force on December 25, 2015,” Asian Infrastructure Investment Bank (AIIB) said in a statement. The board of governors of the Asian Infrastructure Investment Bank will hold inaugural meeting on January 16 and 17 next year. “At that meeting, the board of governors will announce the commencement of operations, in accordance with Article 60 of the articles of agreement,” the bank said. So far, 56 countries have signed the agreement. The United States and Japan have declined to join the China-led AIIB bank, though other US-allies such as Australia, Germany, Britain and South Korea have already joined the bank. China is by far the largest AIIB stakeholder with 30.34% share, followed by India and Russia holding 8.52% and 6.66% respectively. China and India have, for long, developed a rivalry in Asia. But for the AIIB, these two countries have moved beyond their restricted boundaries to emerge as the first and second shareholder in the financial institutions. Headquartered in Beijing, the AIIB will become the first multilateral bank in addition to the BRICS-led New Development Bank (NDB-operated by Brazil, Russia, India, China and South Africa), which is expected to be functional by April 2016. The AIIB is being established with a focus on financing regional infrastructure projects such as airports, transportation, railways and urban infrastructure. The bank is expected to offer loans by mid-2016 with an authorised capital of $100 billion. For India— Asia’s third largest economy— the establishment of the AIIB is of strategic importance as the country needs more than $1 trillion to reinforce its developmental projects. China’s President Xi Jinping had first proposed the idea of establishing the AIIB, which was subsequently agreed by 21 Asian nations including India, Singapore, Malaysia and Pakistan in 2014.
December 26, 2015 | 05:50pm IST