Asian Infrastructure Investment Bank (AIIB)
Candlefocus EditorThe AIIB was established to address the need for improved infrastructure in Asia, where the majority of the population lives in poverty or in underdeveloped areas. It provides loans for projects that benefit the region, such as roads, transportation, clean energy, water supply, sanitation and basic health services.
The AIIB is a multilateral development bank which operates independently of the major international financial institutions such as the International Monetary Fund and the World Bank. This independence allows the AIIB to respond to the needs of the Asian region more efficiently and quickly than the other two institutions.
The AIIB aims to promote regional economic cooperation among Asian countries by financing regional and trans- regional infrastructure projects. These projects include energy, transport, and water resources management, as well as urban development initiatives. In addition, the AIIB also aims to provide access to financial resources to improve the conditions of the people in underdeveloped and poverty-stricken areas across Asia.
The AIIB differs from the other two international financial institutions in terms of its composition, governance, and lending policies. Firstly, the AIIB has a multi-national membership which consists of 57 countries in addition to China who holds the largest voting share in the organization. Secondly, the AIIB’s board of directors is composed of 23 members including representatives from both advanced and developing economies. Thirdly, the AIIB is a self-financed institution and does not rely on external funds for its operations. Finally, it differs from other international financial institutions in that it does not impose conditionality or require a country to adhere to specific macroeconomic policies as a precondition for receiving loans.
Overall, the AIIB is positioned to become an important force in the Asian infrastructure market, with its focus on providing financial support for the development of infrastructure and other economic developments in Asia. This has the potential to not only improve the lives and economic conditions of people living in the region but also to foster regional economic cooperation.