AIIB set to drive investment in Asia
Print Edition
PRESIDENT Xi Jinping has launched a new international development bank, marking a milestone in the reform of global economic governance system.
The Asian Infrastructure Investment Bank will boost investment in the region while contributing to fairer global economic governance, Xi said on Saturday at the formal opening ceremony in Beijing.
“Asia’s financing needs for basic infrastructure are absolutely enormous,” Xi said, adding that the new bank will seek to invest in projects that are “high-quality, low-cost.”
“The funding and inauguration of the AIIB will effectively boost investment to support infrastructure development in Asia. It will serve to channel more resources, particularly private investment, into infrastructure projects,” Xi said.
China pledged to put up most of the bank’s US$50 billion in capital and said the total will rise as high as US$100 billion.
Also on Saturday, Xi unveiled an extra US$50 million fund for infrastructure projects in less-developed countries.
He highlighted measures that will ensure the AIIB “becomes a truly international, rule-based and high standard institution in all aspects, involving its governance structure, operation policy, procurement policy and human resources management.”
For Asia to continue to be the most dynamic region for global growth, it needs to invest in infrastructure and connectivity, Premier Li Keqiang said during the afternoon session of the opening ceremony.
The AIIB, which is expected to start operations in the second quarter, is expected to lend between US$10 billion and US$15 billion a year for the first five or six years.
“We already have a very good pipeline of co-financing projects (with other international development banks) and standalone projects,” said Jin Liqun, AIIB president, adding that while loans will be made in US dollars, the bank may raise capital in other currencies, including the euro and yuan.
“Asia faces severe connectivity gaps and significant infrastructure bottlenecks. It is critical to address these needs, because good infrastructure is a foundation for robust economic growth, and expand economic opportunities and improve the quality of life for everybody,” Jin said.
Luxembourg Finance Minister Pierre Gramegna said the establishment of the AIIB was “further proof of the rebalancing of the world economy.”
The bank will have an internal department focused on compliance and integrity that reports directly to the board, Jin said.
Developing a good corporate culture that holds its staff to high standards was “far more important than just making loans,” he said.
The bank is aiming to approve its first loans before the end of the year, he said.
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