Asian Infrastructure Investment Bank (AIIB) | IBPS PO Prelims & Mains Preparation - Bank Exams PDF Download

Introduction

What is AIIB?

• AIIB is a multilateral development bank proposed by Mr Xi Jinping, President of China in Indonesian Parliament in October 2013 
• 21 founding members signed the bill to open AIIB 
• AIIB was established on 24^th October 2014 
• Head Quarters located in Beijing, China 
• The corpus fund is $100 billion with China as the majority shareholder 
• AIIB will enhance integration and interconnection process of economic development in the region 

List of Banks under this category

• Asian Infrastructure Investment Bank 
• International Monetary Fund 
• New Development Bank – BRICS 
• Asian Development Bank 
• World Bank

Founding Members

• China 
• India 
• Singapore 
• Thailand 
• Pakistan 
• Malaysia 
• Philippines 
• Nepal 
• Cambodia 
• Brunei 
• Vietnam 
• Oman 
• Sri Lanka 
• Kazakhstan 
• Qatar 
• Uzbekistan 
• Myanmar 
• Bangladesh 
• Laos 
• Since establishment, 13 additional members have joined AIIB 
• Now, Total members of AIIB is 57 
• President of AIIB is Jin Liqun 
• G7 and developed nations are not members of AIIB 

Purpose of AIIB

• Aims to develop infrastructure in Asian countries 
• ADB estimates that nearly $13 trillion is essential for economic development of Asia 
• AIIB will help in networking Asian nations to boost trade 

Benefits to China

• AIIB will broaden the regional infrastructure scheme of “One Belt, One Road” (OBOR) 
• OBOR aims to expand all forms of transport – water, road, air and rail from China to Asia, Europe and the Middle East
• Propagate Chinese Renminbi in the international economy 
• AIIB will enable China to play a major role in Asian Affairs 
• AIIB uses the opportunity of the declining US economy to become a global figure in place of World Bank and IMF 
• In the name of Infrastructure development, China strengthens its trade routes with its neighbors and Asian ally nations like Laos (Kunming-Singapore Railway) 
• China and its allies like BRICS form an alternate to the 70 year supremacy of US and allies in the global economy

Concern Areas

• Environmental hazards like to happen in the name of infrastructure development 
• Chinese infrastructure development in Indonesia has witnessed deforestation to a large extent 
• Infrastructure development will result in increasing the pollution level further 
• Controversial proposals of AIIB including railway track through Mount Everest and a railway line passing through the middle of the Amazon forest 
• Ecological disturbance will occur 
• Habitat loss for many species as a result of infrastructure development 
• Chinese bank projects earlier have seen the worst record of environmentally friendly behaviour

Way Ahead

• AIIB shareholding pattern is to be streamlined 
• China is having disputes with many nations who are members of AIIB like India, Vietnam etc. 
• The real challenge of AIIB is keeping aside the disputes and coping with each other for overall development of Asia
• Leadership of AIIB
• Regulatory bodies of AIIB to be established.