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The first annual meeting of the Asian Infrastructure Investment Bank (AIIB) was held in Beijing on June 25-26. The operation of the AIIB since its establishment was introduced and multiple topics with future development included were discussed in the meeting. What has been done by the AIIB over the past half a year?
Loans totaling over USD500 mln approved
AIIB President Jin Liqun announced the four loans approved earlier by the board of directors, totaling 509 million U.S. dollars, to finance four projects at the first day of the annual meeting. The four projects include the loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, the loan for the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, the loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh and the loan for a National Slum Upgrading Project in Indonesia.
“The four projects come from four countries in Asia, making the demands of different countries heard, the loans not centralized and the projects arranged in a reasonable manner. In addition, over 500 million U.S. dollars are invested in infrastructure field, showing that the AIIB totally follows its initial aim. It should be admitted that a good start has been made since the AIIB was established half a year ago”, as indicated by Zong Liang, deputy director of the Institute of International Finance at the Bank of China, during the interview with SSN.
In the meantime, the organizational structure system of the AIIB is gradually taking shape. As introduced by Jin, recruiting top talents has always been the first recruitment rule of the AIIB. The top management team of the bank will soon be built, while the recruitment of middle management is still underway. It is expected that the total number of employees will reach 100 by the year end.
Zong pointed out that the AIIB’s recruitment of top talents globally demonstrates its global perspective. For example, deputy governors of the bank come from the UK, Germany, India, Korea, Indonesia and etc. Such personnel setting will help the bank to develop various businesses in a more fair and balanced manner.
More countries apply for joining in the AIIB
The attraction of the AIIB has been recognized by more and more economies amid practice. As introduced by Jin in the annual meeting, there are now 24 potential members applying for joining in the AIIB. New members might enter the AIIB at early 2017. Since there are already 57 members in the AIIB, the total number will be lifted to at least 81 at early 2017 and the AIIB will become the largest regional multilateral development bank in terms of the number of members if the 24 economies can all succeed in application.
Such absorption effect is shown in loan supply. Jin pointed out that “the target for loan supply in 2016 is set around 500 million-1.2 billion U.S. dollars. We are confident in achieving the goal and we might even beat the goal.” In addition, the AIIB also has established a special fund which mainly focuses on supporting less developed member countries in the financing of infrastructure projects. China, the first donator of the fund, will contribute 50 million U.S. dollars.
Steady capital support and loan supply will make more countries interested in the projects of the AIIB. Sri Lanka's finance minister Ravi Karunanayake indicated that “the AIIB now sees sound operation and we are optimistic about its development prospect. Though Sri Lanka hasn’t developed any specific project with the AIIB, it is actively making preparation for that and pays close attention to infrastructure projects like agricultural and farmland irrigation projects.”
(APD/XH FINANCE)
