AIIB to focus on infrastructure, cooperate with existing multilateral institutions
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WASHINGTON -- The Asian Infrastructure Investment Bank (AIIB) will focus on infrastructure and cooperate with existing multilateral institutions such as the World Bank and the Asia Development Bank (ADB), China's vice finance minister said Friday.
"This bank is just focusing on infrastructure. This purpose couldn't be removed anymore and anytime," Zhu Guangyao said of the China-proposed new multilateral institution at the Atlantic Council, a Washington D.C.-based think tank, on the sidelines of the ongoing spring meetings of the International Monetary Fund (IMF) and the World Bank.
There's "a real gap" in infrastructure investment in Asia, Zhu said, noting that India and other Asia countries are now facing the same challenge of infrastructure bottleneck.
With initial subscribed capital of 50 billion US dollars and planned authorized capital of 100 billion dollars, China is aware that the bank and its members alone cannot bridge the funding gap, Zhu said.
The AIIB is intended to play a complementary role alongside existing multilateral development banks, and China welcomes the World Bank and the ADB to increase infrastructure investment, Zhu said.
The heads of the World Bank and the IMF also said Thursday that the two organizations are willing to strengthen cooperation with the AIIB to unleash the huge potential in the region.
"Infrastructure needs in the developing world are enormous. They are enormous in Asia for AIIB. Our full expectation is that we will continue to work closely," said World Bank President Jim Yong Kim at a press conference.
Asia's overall national infrastructure investment needs are estimated to be 8 trillion dollars between 2010 and 2020, the ADB said.
Representatives of the 57 prospective founding countries of the AIIB, which were finalized Wednesday, will gather in Beijing later this month to discuss the mandate of the bank, Zhu said.
The bank must be operated on the basis of the rule of law, Zhu said, in anticipation of conclusion of the negotiations on the mandate in two or three months.
"We agree with high standards, and opinions will be gathered through negotiations and reflected in the formal legal document," he said.
Zhu noted the board of the AIIB will discuss detailed policy guidance for projects evaluation with the bank's executive management teams, and the bank could draw some useful experience from the World Bank and the ADB.
Zhu also reiterated China's commitment to the current global financial order created by the World Bank and the IMF in the capacity of the Bretton Woods institutions, noting China is a key member of the IMF and the World Bank.
China's role in the current international financial system is constructive and "we make contributions," he said.
"We want to improve. We want to enhance the capacity of the current system rather than any intention to overthrow it."
Zhu strongly urged the U.S. Congress to quickly approve the long-delayed 2010 IMF quota and governance reform to reflect the growing role of emerging market economies in the global economic structure.
"It's five years, too long time, too much delay. That has damaged the reputation of the IMF, damaged the reputation of the G20 and also damaged the image of the United States," he said.
The G20 remained "deeply disappointed" with the continued delay in IMF quota and governance reform, finance ministers and central bank governors of the G20 agreed Friday.