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Asian Infrastructure Investment Bank (AIIB)

Asian Infrastructure Investment Bank (AIIB)- Relevance for UPSC Exam

  • GS Paper 2: International Relations- Important International institutions, agencies and fora- their structure, mandate.

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Asian Infrastructure Investment Bank (AIIB)- Context

  • Recently, Former Reserve Bank of India (RBI) governor Urjit Patel has been appointed vice-president of the Beijing-based Asian Infrastructure Investment Bank (AIIB).
  • Patel will serve a three-year term as one of the multilateral development bank’s five vice-presidents, and will take the place of former Gujarat Chief Secretary D.J. Pandian.
    • He will be leading the AIIB’s investment operations and all sovereign and non-sovereign lending in South and Southeast Asia.

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Asian Infrastructure Investment Bank (AIIB)- Key Points

  • About: Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia.
    • AIIB Headquarter: Asian Infrastructure Investment Bank (AIIB) headquartered in Beijing and began its operations in January 2016.
  • AIIB Articles of Agreement: Asian Infrastructure Investment Bank (AIIB) was established through this agreement.
    • Asian Infrastructure Investment Bank (AIIB) came into force on 25 December 2015).
    • Asian Infrastructure Investment Bank (AIIB) commenced its operations in 2016.
  • AIIB Membership: The Parties (57 founding members) to agreement comprise the Membership of the Bank.
    • Asian Infrastructure Investment Bank (AIIB) membership has now grown to 104. The U.S. and Japan are not among their members.
    • Fourteen of the G-20 nations are AIIB members including France, Germany, Italy and the United Kingdom.
  • AIIB Membership Criteria: Membership to the Asian Infrastructure Investment Bank (AIIB) is open to all members of the Asian Development Bank or the World Bank.
    • The bank also allows non-sovereign entities to apply for membership provided their home countries are members.
  • Shareholder & Voting Right: In AIIB, China is the largest shareholder with 26.61 % voting shares in the Asian Infrastructure Investment Bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).
    • The regional members hold 75% of the total voting power in the Asian Infrastructure Investment Bank (AIIB).

WTO Says, China is a Developing Country

 

Asian Infrastructure Investment Bank (AIIB)- Key Objectives

  • AIIB aims to promote sustainable economic development, create wealth and augment infrastructure connectivity in Asia by investing in infrastructure & other productive sectors.
  • AIIB working towards fostering regional partnership & cooperation to address developmental challenges by working in tandem with other bilateral and multilateral developmental institutions.
  • Asian Infrastructure Investment Bank (AIIB) promotes investment in private & public capital for development purposes.
  • AIIB uses the resources at its disposal for funding development in the region, including projects that will contribute to the balanced economic growth of the region.
  • AIIB also works for promoting private investment in enterprises, activities, and projects contributing to economic development in the region wherever private capital is not available.

18th India-ASEAN Summit

 

Asian Infrastructure Investment Bank (AIIB)- India and AIIB

  • Voting Rights: India has a 7.6% shareholding of the AIIB. This makes India the second-largest shareholder in the Asian Infrastructure Investment Bank (AIIB), next only to China.
  • Infrastructure Financing: AIIB has approved more loans for India than any other member of the bank. The AIIB has funded 28 projects in India amounting to $6.7 billion.
    • The projects in India span a range of sectors such as energy, water, transport, etc. including the Bangalore Metro Rail.
    • Last year, the AIIB also approved a $356.67 million loan to the Indian government to support the expansion of the Chennai metro rail system.
    • The bank has also given approval for $500 million for a COVID-19 Emergency Response Fund and Health Systems Preparedness Project in India.

 

India’s Trade with China in 2021 is set to cross the $100-billion mark

India’s Trade with China in 2021 is set to cross the $100-billion mark

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