By Liu Zhiqin Source: CGTN Published: 2019-01-17
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank proposed by China and jointly established by 57 countries on December 25, 2015. It began operations on January 16, 2016, and it has now grown to 93 approved members worldwide.
The AIIB is a masterpiece in international banking history. Although it has only been established for three years, it has won international fame.
A friend of mine who is a senior banker in Europe has spoken highly of the AIIB, saying that the institution is very international, very rational and very regional, due to its structure and philosophies of development.
In retrospect, there were only about 50 countries announced joining the bank in 2016. At the time, no one was confident that the bank would be so international after three years. The function of the bank is very clear and very simple: to support the infrastructure projects in Asian countries and other parts of the world.
The market demands for infrastructure items reached about 1 trillion U.S. dollars each year, but the international market, including the Asian Development Bank (ADB), the World Bank and European banks could not provide enough funds to the needy. The AIIB is designed to figure it out.
I still remember that a friend of mine who owned a big company in China had asked the ADB to lend money to build a water processing factory, and they had to wait three years till their application was approved. The internal evaluation time at the bank is too long for urgent projects. But such a case would never happen with the AIIB, due to the bank having a management mechanism that is more effective and shortens the time a project needs.
Until now, the AIIB has invested in Russia, India, Pakistan, and some other countries with a total of 200 billion U.S. dollars in local projects. These projects will create millions of jobs for local markets and improve the standard of living in many rundown areas.
From this point of view, we can see that the AIIB is an international bank that supports projects related to countries along the Belt and Road Initiative (BRI). Serving the related countries, it is clear that the AIIB is as important as the ADB and the World Bank regarding global cooperation.
Time files, while the scale and the staff of the AIIB have rapidly increased. The top management had shown its determination to avoid any possible traps that may result in bureaucracy. The bank had attached great importance to increasing efficiency and transparency in operating and communicating within a number of countries.
The questions and inquiries from different parts of the world have been highly respected and given feedback in due time. That's why the AIIB could get rid of Parkinson's Law to keep itself dynamic, vivid and active in the market.
“Parkinson's Law" is the relation between the time needed and actions you have taken to complete a particular task. Sometimes it needs a lot of people to finish one thing in a limited time frame. The AIIB has a special mechanism to make the best use of human resources by allocating people to positions they are specializing in. Therefore, it is able to limit the effects of "Parkinson's Law."
Along with the development of the world economy, the demand for funds to support infrastructure projects will become more multinational. Japan and the U.S. will see that the AIIB can develop well with support from all member countries. Although the institution has the time and resources to wait out the U.S. and Japan joining the family, we hope that they will not wait too long due to the rapid development of the world economy.
New challenges are still ahead and reform and self-discipline will also become key elements to fulfilling all obligations and commitments of AIIB to the whole world. These new challenges will primarily include the spread of protectionism and nationalism around the world.
Major countries are trying to intensify trade tensions and make more policy barriers in order to slow down the speedy development of emerging markets. More importantly, a few of these nations have tried to shift their financial crises to poor countries, increasing conflicts in certain areas, such as Latin America and Eastern Europe.
Despite the challenges ahead, I firmly believe that AIIB is capable of performing even better in 2019.
Liu Zhiqin is a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China.