Table of Contents
- The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank initiated by China that aims to support the building of infrastructure in the Asia-
Pacific region. - It is viewed as Asia’s response to West-dominated Asian Development Bank (ADB) and World Bank (WB)
ABOUT AIIB
- It was officially established in December 2015 with mission to improve social and economic outcomes in Asia and beyond and opened for business in January 2016.
- It is headquartered in Beijing, China. Its goals are to boost economic development in Asia-Pacific region, provide infrastructure, and promote regional cooperation and partnership. It priorities investments in energy, power generation, transport, rural infrastructure, environmental protection and logistics in Asia.
AIIB
- The starting capital of the bank was $100 billion, equivalent to 2⁄3 of the capital of
the Asian Development Bank and about one third that of the World Bank.
CAPITALS AROUND THE WORLD
- The authorised capital of the World Bank is $280 billion, the Asian Development Bank $164
billion, the Inter-American Development Bank $171 billion, the African Development Bank $103 billion, and the European Bank for Reconstruction and Development $39 billion.
SOURCE OF FIGURES
INDIAN SCENARIO
- India has emerged as a top borrower from the China- sponsored Asian Infrastructure Investment Bank (AIIB) with USD 1.5 billion worth of loans last year and USD three billion more in the pipeline.
- Almost 28 per cent of the money lent by AIIB in first two years of operation has gone to projects in India.
- India is also the only country apart from China to enjoy a permanent seat on the Bank’s board of directors.
INDIA AND AIIB
- The biggest AIIB loan to an Indian project approved so far has been US$335 million for a metro rail project in the southern Indian city of Bangalore that includes 13.6 miles (22km) of railway line and 18 stations.
INDIAN SCENARIO
- China holds just under 27 per cent of its voting shares in AIIB. That gives Beijing effective veto power, as major bank decisions require at least 75 per cent support.
- India is the second largest shareholder, with 7.7 per cent of the votes, followed by Russia with 6.1 per cent and Germany with 4.27 per cent.
NOTES
- The 3rd Annual Meeting of Asian Infrastructure Investment Bank (AIIB) concluded in Mumbai, Maharashtra in optimistic note to raise its lending capacity to boost prosperity and security in Asia.
- The meeting was jointly organised by Department of Economic Affairs under Union Finance Ministry and AIIB.
- The theme of third meeting was ‘Mobilising Finance for Infrastructure: Innovation and Collaboration’. It was attended by over 3,000 delegates from 86 member countries of AIIB.
- The first AIIB board of governors annual meeting was held in Beijing, China in 2016 and second in Jeju, South Korea in 2017 . The fourth annual meeting will be held in
Luxembourg in July 2019. Luxembourg is a founding member of AIIB. - It is also leading international financial center in Europe and facilitator of investments between Europe and Asia.
INDIA AND AIIB
- India needs $4.5 trillion to finance and achieve holistic development of its infrastructure.
- Domestic banking institutions and finances are insufficient to meet such high demand for investment, and thus, the role of multilateral institutions targeting infrastructure projects such as NDB, AIIB assumes significance.
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