The $100 billion Asian Infrastructure Investment Bank is rapidly taking shape. Weeks after the bank’s multilateral interim Secretariat launched its articles of agreement and recruitment procedures, the establishment process is now focused on how the China-led institution will be operated and managed.
Jin Liqun, secretary-general of the interim secretariat and China’s official president-designate of AIIB, explained Friday in a briefing session in Beijing that the infrastructure development-focused institution will follow a more business-like approach in its operations and will move away from traditional country-focused development strategies.
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The former senior finance official explained that AIIB will “follow business lines like private companies” in pursuing development projects but still keeping in mind countries’ needs — despite a diversion from a more country-focused approach — by establishing a special department to accommodate these issues.
More details are still needed to get a full assessment of what a businesslike approach for AIIB would mean for developing member countries and other development stakeholders, particularly the private sector. But this move cements the Beijing-based institution’s determination to do things differently — as can be seen in how the bank was structured, among others, to keep its “regional feel” by limiting shareholdings of nonregional members to less than one-third.
But Jin has been very diplomatic about his institution’s capacity to cooperate — instead of a zero-sum competition — with established development powers, including a co-financing partnership. He was also honest that AIIB “would definitely make mistakes since every system leaves room for improvement,” so the most important thing is to have the “guts to acknowledge them” all the while learning how to learn from past experiences of similar institutions.
“Jin welcomed countries to be frank about the operation of AIIB. Only by being frank could they become real friends with China,” a consultant from InterDev China Consulting present at the briefing told Devex. “Jin said that it was now China’s turn to contribute to global development. China believes that all countries are equal … to share its experience by doing something international.”
AIIB will also be based on a “lean, clean and green” approach. Jin emphasized the the Beijing-based institution “will not have a resident board, unlike existing multilateral banks” to be able to hold the management committee accountable.
Other notable updates from the briefing session include the decision to use the U.S. dollar as the bank’s currency and English as the working language. Hiring of AIIB consultants and regular staff — not just for the secretariat — may start in September. The bank is also expected to invest in countries outside the region — including Africa, Latin America and Eastern Europe — later on, and transition from hard infrastructure, such as bridges and roads, to projects in health care and education, to name a few.
Jin wrapped up the session by saying that “the door is always open to Japan and the U.S. who can join anytime.”
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