The Asian Infrastructure Investment Bank (AIIB) was primarily a vehicle to fund BRI-related projects as well as to further China’s strategic goals. Do you agree? Justify your stand. (200 words)
Refer – Live mint
Enrich the answer from other sources, if the question demands.
IAS Parliament 6 years
KEY POINTS
· The multilateral development bank “AIIB” was established in 2016 with its headquarters located in Beijing.
Suspicions in its aims and intentions
· The initial scepticism towards AIIB was that it was primarily a vehicle to fund BRI-related projects as well as to further China’s strategic goals.
· This was partly to do with the fact that –
· The AIIB project was first announced in 2013 simultaneously with Chinese President’s mooting the Belt and Road Initiative (BRI).
· The initial projects approved by the AIIB in 2016 were granted to China’s close allies—mainly in Central Asia and Pakistan, as well as Oman, which was a strategic centre of trade and exchange along the historic maritime Silk Road.
· China is the AIIB’s single largest contributor and holds around 28% voting share, giving it veto power over major decisions at the AIIB.
Collective Institution
· But the facts when analysing AIIB’s functioning, proves that the AIIB is evolving towards being a truly collective institution.
· Several other AIIB-funded projects that have been approved have no obvious connection to the BRI nor are they concentrated among China’s closest allies.
· For instance, India was the single-largest borrower from the AIIB in 2017 and the second-largest shareholder of AIIB.
· As of end 2017, AIIB had granted just over $1 billion worth of loans for various infrastructure projects in India.
· Besides these, financing for another $1.2 billion worth of projects from India has been proposed.
· After all, India has expressed reservations about the BRI (notably the CPEC) and did not send an official delegation to the inaugural Belt and Road Forum.
· The fact that India has become an important recipient of AIIB loans is noteworthy and indicates the degree of independence of the AIIB from the BRI.
· Meanwhile, the BRI is largely funded separately via bilateral lending from the Silk Road Fund and two Chinese policy banks.
· There is therefore a clear difference between the AIIB and other China-specific financial entities.
· The AIIB appears to be well on its way to becoming a credible institution that promises to make an important contribution in providing regional and global public goods.
