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Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia Pacific region. AIIB is regarded by some as a rival for the IMF, the World Bank and the Asian Development Bank (ADB), which the AIIB says are dominated by developed countries like the United States and Japan.

Contents

  • History 1
  • Member countries 2
    • Founding members 2.1
    • Invited countries 2.2
  • Reception 3
  • References 4
  • External links 5

History

The first news reports about the AIIB appeared in October 2013.[1] China has been frustrated with the slow pace of reforms, governance and greater input in global established institutions like the IMF, World Bank and Asian Development Bank which are dominated by American, European and Japanese interests.[2] It has been identified the region requires $8 trillion to be invested from 2010 to 2012 in infrastructure for the region to continue economic development.[2][3] It is hoped that the new bank will allow China which has enormous capital to finance these projects and allow it a greater role to play in the economic development of the region consummate with its growing economic and political clout.[4]

In June 2014 China proposed doubling the registered capital of the bank from $50 billion to $100 billion and invited India to participate in the founding the bank.[5][6] On October 24, 2014, a signing ceremony held in Beijing, formally recognized the establishment of the bank. 21 countries signed the bill, which included: China, India, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan, and Vietnam.[7] U.S. pressure led Australia, Indonesia and South Korea from signing up as founding members, despite the fact that they had formerly expressed an interest in it.[8]

The next step is to negotiate the bank’s ­articles of agreement, which is expected to be completed by the end of 2015.[9][10]

Member countries

China will stake major shares while other Asian countries like Malaysia, Thailand, India, Sri Lanka and Nepal, have agreed to sign the MoU.[11] Bangladesh is going to sign an MoU with China on 24 October 2014.[12]

Founding members

Member countries Date of accession
 Bangladesh 2014
 Brunei 2014
 Cambodia 2014
 China 2014
 India 2014
 Indonesia 2014[13]
 Kazakhstan 2014
 Kuwait 2014
 Laos 2014
 Malaysia 2014
 Mongolia 2014
 Myanmar 2014
   Nepal 2014
 Oman 2014
 Pakistan 2014
 Philippines 2014
 Qatar 2014
 Singapore 2014
 Sri Lanka 2014
 Thailand 2014
 Uzbekistan 2014
 Vietnam 2014

Invited countries

The initial $50 billion was mostly provided by China, but Pakistan, India, Singapore and Vietnam were also signatories. However, There are a total of 21 signatories.[14] Japan, South Korea, Indonesia, and Australia were not in attendance, but China’s Ministry of Finance said "any country that signs and ratifies the articles can still officially become a 'founding' member" though they must first be accepted by the existing members.[9]

Reception

The president of the World Bank,

  • Asian investment bank: Realigning the status quo by The Straits Times
  • India Considering Joining New Regional Infrastructure Bank by The Wall Street Journal
  • Nepal to be founding member of Asian Infrastructure Investment Bank by GlobalPost

External links

  1. ^ "An Asian infrastructure bank: Only connect", The Economist, 4 October 2013.
  2. ^ a b Brant, Philippa (25 September 2014). "Why Australia should join the Asian Infrastructure Investment Bank". http://www.lowyinterpreter.org/. Retrieved 27 October 2014. 
  3. ^ Bhattacharyay, Biswa N. (9 September 2010). "Estimating Demand for Infrastructure in Energy, Transport, Telecommunications, Water and Sanitation in Asia and the Pacific: 2010-2020". ADB. Retrieved 27 October 2010. 
  4. ^ view on the Asian Infrastructure Bank: the US should work with it, not oppose it: It’s no surprise that China is promoting a solution to the shortage of infrastructure capital in Asia"The Guardian". The Guardian. 27 October 2014. 
  5. ^ Jamil Anderlini, "China expands plans for World Bank rival", The Financial Times, June 24, 2014.
  6. ^ Atul Aneja, "China invites India to join Asian Infrastructure Investment Bank", The Hindu, June 30, 2014.
  7. ^ "China, 20 other countries initiate new Asian bank", Mail Online, 24 October 2014.
  8. ^ "China launches AIIB in Asia to counter World bank","Affairscloud" , 24 October 2014.
  9. ^ a b Murray, Lisa (27 October 2014). "China leaves door open for Australian turnaround on Asia bank". The Australian Financial Review. 
  10. ^ "Three major nations absent as China launches W.Bank rival in Asia". Reuters. 27 October 2014. Retrieved 27 October 2014. 
  11. ^ Golam Moin Uddin, "BD going to be founding member of Asian Infrastructure Investment Bank in the offing", UNB, 19 October 2014.
  12. ^ Abdur Rahim Harmachi, "Bangladesh more interested in AIIB", bdnews24.com, 15 October 2014.
  13. ^ "Indonesia becomes 22nd founding member of AIIB". Xinhuanet.com. 27 November 2014. Retrieved 28 November 2014. 
  14. ^ http://news.yahoo.com/china-21-other-countries-initiate-asian-bank-025611214.html
  15. ^ "World Bank welcomes China-led infrastructure bank", Reuters, July 8, 2014.
  16. ^ "Statement by Asian Development Bank President Takehiko Nakao", 24 October 2014.

References

[16], noted the "huge infrastructure financing needs" in Asia and said that the establishment of the AIIB is an understandable step. He said that when AIIB is established, ADB will be willing to consider appropriate collaboration and, at the same time, urged that AIIB adopt international best practices in such areas as procurement and social safeguards on lending arrangements.Takehiko Nakao The president of ADB, [15]

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