China-led AIIB development bank officially launched, elects first president

The Korean government announced that Deputy Prime Minister and Minister of Strategy & Finance Yoo Il-ho attended the inaugural meeting and opening ceremony of the Asian Infrastructure Investment Bank (AIIB) in Diaoyutai, Beijing on January 16 and 17.

Timor Maximov, an aide to the Russian finance minister, has been appointed a member of the board of directors of the Asian Infrastructure Investment Bank (AIIB), Russian Finance Minister Sergei Storchak told journalists on Sunday. AIIB, together with other multilateral development institutions, would not only accelerate the inclusive growth of Asian countries’ economies but will also support the global economic recovery. Prior to that, Mr. Jin was Chairman of China International Capital Corporation Limited, China’s first joint-venture investment bank. I am also proud that New Zealand was the first OECD country to become a founding member of the Bank.

The value of AIIB’s authorized capital amounts to $100 billion, with nearly $30 billion invested by China.

Earlier this month ADB President Takehiko Nakao said he did not think the AIIB would diminish his institution, adding the two organizations “can complement each other”.

Despite recent declines, China has the world’s largest foreign exchange reserves, and policymakers have repeatedly said they have the firepower to keep the yuan stable.

“The AIIB is specifically for infrastructure so we see it as a supplement to projects in Nepal funded by the ADB (Asian Development Bank) and World Bank”, he said.

In his address at the founding conference of the AIIB council on Saturday afternoon, Chinese Premier Li Keqiang said the operation of the new multinational development bank is “of positive and constructive significance for the global economic governance reform”.

By not insisting on some free market economic policies recommended by the World Bank, the AIIB might avoid the criticism leveled against its rivals, which some say impose unreasonable demands on borrowers. Jin Liqun, who has served as AIIB’s President-designate since September 1, 2015, was elected to that position.

The election of India to board of directors of the AIIB expected to provide significant role for it as it is the forum that approves the loans for projects.

Washington has said it welcomes the additional financing for development, but had expressed concern that looser lending standards might undercut efforts by existing institutions to promote environmental and other safeguards.