The Asian Infrastructure Investment Bank (AIIB) is a new multi-lateral lending institution that came about in Jan 2016.
AIIB is a Chinese baby. It was proposed by China; it is headquartered in Beijing. A Chinese, Jin Liqun, is the current President of AIIB. Below him, there are 5 vice presidents, 1 of whom is an Indian.
China wanted to give it a character of a multi-lateral institution. Hence, it invited several countries, including India, to become founding partners. 57 countries became Founding Members. Currently 102 countries are members.
Look at some key numbers:
- China has committed to USD30B investment, 30% of the target USD100B capital of the fund. In contrast, USA’s voting share in the World Bank and its sister entities is 18-25%.
- India is the second largest contributor with USD8.4B commitment
- What’s interesting is – USA and Japan are not members of AIIB
- Though most first world countries like Australia, France, Germany, Canada, UK, South Korea etc which are members. All Arab countries appear to be members.
- India has received funding for several projects from AIIB
However, in hindsight, it is not clear whether India should have made such a strong commitment to a China dominated entity. Most commentators seem to agree that AIIB is not the funding arm for China’s One Belt One Road (OBOR) initiative. Studies were produced when AIIB was launched that Asia desperately needed infrastructure, which World Bank or Asian Development Bank were not able to fund.