More recently, the Asian Infrastructure Investment Bank began operations. This is a young international financial organization that already has quite significant significance in the global economy. More and more states are interested in membership in this organization and in cooperation with it. Let's define what the Asian Infrastructure Investment Bank is, who its founders are and what its main goals are.
History of creation
Asian Infrastructure Investment Bank has a rather interesting background to its creation. The PRC leader was disappointed with the development of the then existing international financial institutions such as the IMF. In his opinion, they developed at a rather slow pace, and their main goal was to protect the interests of the United States, Japan and the EU. The Asian Infrastructure Investment Bank was designed to address these shortcomings.
In mid-2014, the Chinese side sent an invitation to India to participate in the project. In this regard, the planned authorized capital of the organization was doubled, up to $ 100,000 million.
In October 2014, 21 countries in South and Southeast Asia signed a Memorandum of Understanding in Beijing. In the same countries, the founders of the Asian Infrastructure Investment Bank agreed on further joint actions. This was a turning point in the creation of the organization. It is believed that on October 24, the Asian Infrastructure Investment Bank officially began work.
Organization goals
The main goal pursued by AIIB is the development of the economic and financial segment of the Asia-Pacific region. This organization finances specific projects that are designed to improve the infrastructure of the region or help specific participating countries to overcome financial problems or to solve specific problems.
In some ways, the AIIB resembles the IMF or the World Bank, but has a regional focus.
Founders
Let's find out which countries were the founders of the Asian Infrastructure Investment Bank (AIIB) at the base of the organization. These countries include:
- Pakistan.
- Thailand.
- China.
- Singapore.
- India.
- Philippines.
- Vietnam.
- Uzbekistan
- Mongolia.
- Kazakhstan.
- Cambodia.
- Malaysia.
- Bangladesh
- Oman.
- Kuwait.
- Sri Lanka.
- Qatar.
- Nepal.
- Brunei.
- Myanmar
- Laos.
In addition, China has the status of the founding country of AIIB. The Memorandum of October 24 stated that by March 31, 2015, any country in the world can apply for entry into the Asian Infrastructure Investment Bank. The founders, thus, were supplemented by such states as Saudi Arabia, Tajikistan, etc.
Members
But even after March 31, 2015, any country in the world can apply for membership in AIIB. True, at the same time, if her candidacy is considered positively, she will receive the status of not a founder, but a participant. However, it will have practically the same rights as other countries that are members of the Asian Infrastructure Investment Bank. Participants are divided into two large groups: regional and non-regional members.
The first group includes the countries of the Asia-Pacific region, such as Iran, Israel, Kyrgyzstan, Indonesia and others.
The second group is represented by those countries that are located in other parts of the world, but are interested in close cooperation with the states of this region. These are countries such as Austria, Germany, Brazil, Portugal, Switzerland, Great Britain, Germany, etc.For example, Germany is in fourth place among all members of the organization in terms of investment and has the corresponding number of votes in the vote. The total number of non-regional participants is 21 countries.
The total number of countries participating in the Asian Infrastructure Investment Bank organization currently stands at 57 countries.
Organization Development
But the Memorandum was, rather, a statement of intent, rather than a document regulating the work of the organization. In order for AIIB to become a truly working financial structure, it still has a long way to go. Ahead is waiting for a dialogue between participants on the development of a functioning mechanism. This is a time of negotiation and compromise.
The first leg of this journey has already been completed. From November 2014 to March 2015, at the meetings in Kunming, Mumbai and Almaty, an Agreement on the establishment of the AIIB was developed. Now the countries of the Asian Infrastructure Investment Bank should sign the text of this agreement in order to be able to move on to the next stage of formation of the organization.
In January 2016, a grand opening of the bank took place in Beijing, which was held in the form of a ceremony.
Expandability
As mentioned above, AIIB is not a closed organization; potentially, any country in the world that wants this and meets certain conditions can join it.
At the moment, countries such as Canada, Ukraine and Belgium are considering applying for membership in the organization. Hungary has already received candidate status.
Membership Denial
At the same time, the DPRK and Taiwan have already been refused in response to a request for membership in AIIB. The DPRK's refusal was given due to the discrepancy between its domestic economic realities and the standards of a market economy. Taiwan did not receive specific explanations regarding the denial of membership. But with a high degree of probability we can say that political motives played an important role here. As you know, China has a decisive vote in AIIB, and at the same time, the regimes of the PRC and Taiwan are opposed to each other. However, the Chinese leadership has already stated that Taiwan’s membership in AIIB is still possible in the future. Taiwan currently has candidate status.
There are also states that expressly stated that they did not intend to participate in AIIB. These primarily include the United States and Colombia. Japan initially showed interest in the project, but under pressure from the United States, it was also forced to make an official statement that it was not going to become a member of this financial structure. It should be noted that Japan, together with the United States, plays a leading role in the Asian Development Bank, which is actually a competitor to AIIB.
Russia in AIIB
Our country is also interested in working as part of the Asian Infrastructure Investment Bank organization. Russia announced the possibility of such a prospect at the end of March 2015. In mid-April, she was already a member of the AIIB.
China enthusiastically accepted the decision of the leadership of the Russian Federation.
Currently, Russia owns 5.9% of the vote in the organization, which, after China and India, is the third largest influence indicator. In addition, the delegate from the Russian Federation A. Ulyukaev is a member of the AIIB Governing Council. Recall that Alexey Valentinovich also holds the post of Minister of Economic Development of the Russian Federation.
Managment structure
Like any other organization, AIIB has its own governance structure.
The main body, whose tasks include the strategic leadership of the organization and the adoption of the most important decisions, is the Governing Council. Each participating country is represented by one delegate. But the weight of the delegate’s vote depends on the amount of participation of a particular state in the formation of the AIIB statutory fund. Thus, the delegate from China has 26.06% of the vote of all participants in the Governing Council and the right of veto on any decision.India has 7.5% of the vote, and Russia - 5.92%. All other participants have a lower percentage of votes on the Board of Governors.
An important management body is the Board of Directors. It includes 12 people. The Board of Directors is meeting to make important decisions.
Directly, operational management is carried out by the executive bodies of AIIB. These include the president of the organization, vice presidents, and other management personnel.
Development prospects
The AIIB organization has rather optimistic development prospects, as evidenced by leading experts. Moreover, many of the analysts believe that in the near future this structure will become a real competitor to the IMF, the World Bank and the Asian Development Bank. However, the AIIB representatives themselves say that they do not set such goals.
At the same time, only the blind cannot help but see that the AIIB is one of China's expansionist projects. This country has already become one of the largest players in the international financial market, and is trying to further strengthen its position. Such organizations can create a threat to the US monopoly in international lending, which, of course, is a positive thing. For example, the US share in the IMF is more than 16%, and China in the AIIB - 26.06%. It is the fear of China's increasing role in the global economy that explains the US’s reluctance to take part in the full-blown AIIB.
The leading role of the BRICS countries (China, India and Russia) in the bank's activities makes it a good alternative to the IMF, so far of a regional scale, but with claims to a higher status. Although officially these claims are not voiced.
Despite the fact that the new banking organization may be a direct competitor to the World Bank, the president of the latter spoke positively about the fact of the creation of the AIIB.
The head of the Asian Development Bank expressed hope for cooperation between the structure, which he leads, and the new organization.
Bank value
The importance of AIIB in the case of the successful implementation of this large-scale project is difficult to overestimate. He will be able not only to compete with similar existing organizations, which will significantly improve the atmosphere of financial interaction, but will also attract significant financial investments in the region, which, of course, will contribute to its rapid and intensive development.
Of course, the creation of AIIB can bring considerable benefits to its members, the Asia-Pacific region, as well as the global economy as a whole, which is in dire need of new sources of funding.
In addition, the organizers want it or not, but the AIIB is another brick in building a multipolar world without the obvious dominance of any one country over the rest. Other components of this chain are BRICS, SCO and similar organizations of developing states.
Whether AIIB will go to the forefront, only time will tell, but the organization has a remarkable starting potential for the successful continuation of its activities.
