In 2009, at China’s version of Davos, the Bo’ao Forum, a Chinese scholar advocated for setting up a regional bank that will accelerate the development of Asian countries by closing the infrastructure gap in Asia. The proposed name of the bank was the Asian Infrastructure Investment Bank, and, eight years later, its fate would be tied not only to China and Asia, but also to Europe, Africa, Australia and even the Americas. The six continents are now encompassed by the AIIB (Asian Infrastructure Investment Bank), which was brought to life under the leadership of Chinese President Xi Jinping, as a bank that would alleviate poverty from Asia especially through investments in infrastructure.
There is an old Chinese proverb that says that “if you want to be rich, you must first build roads”, so in 2016, China, together with its new squadron of 56 AIIB countries, started the construction of nine projects. The charm of development recently attracted 13 new countries that became members of the AIIB in March 2017, with the hope that they too will reap the benefits about which the Chinese proverb speaks.
AIIB may be seen as the sibling of the other giant Chinese project, the Belt and Road Initiative (BRI), as both of them were announced at the same time and they complement each other. While BRI was described as a $4 trillion project that lacks the financial consistency, the AIIB, on the other hand, has the financial firepower to support some of the projects along the countries that signed up for BRI. Jin Liqun, the President of the AIIB, seems to support the idea that the AIIB will help BRI implement its projects, but the bank shouldn’t be perceived exclusively through the lens of the Belt and Road Initiative.
On a wider spectrum, the AIIB was seen, at its founding, like a challenge to the international financial system, dominated by the World Bank and the Asian Development Bank (ADB). But the AIIB was to prove that it wasn’t a challenger of the ADB and the World Bank, but more like their new investment companion. The AIIB has a capital of $100 billion, which represents half of the World Bank’s capital ($223 billions) and 2/3 of the Asian Development Bank’s capital ($160 billions). This is one of the reasons that almost all of the AIIB’s investments were made in concert with one of these two financial institutions, even if we think about a slum project in Indonesia, a road project in Tajikistan, a motorway in Pakistan, a port investment in Oman or even the colossal Trans-Anatolian gas pipeline (TANAP) project. Moreover, the partnerships concluded with the ADB and the World Bank, plus those with the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD), give the AIIB the opportunity to avoid being seen as an ostracised institution because of its financial standards (which were in doubt in 2015). To be more trustworthy, the AIIB set up a compliance-and-integrity unit whose goal is to monitor its management and to strengthen its position as a bank prone to respect all financial standards, putting it on a clear and credible path. By letting itself be shaped by western practices and standards, the AIIB proved that it isn’t a challenger to the financial status quo, but a complement to the existent institutions like the ADB or the World Bank.
Day by day, the AIIB seems to become a more global institution. If at first, when it was proposed in 2014, it was the embodiment of a new Asian Bank, the wave of expansion in 2015 that brought Great Britain, Germany, France, Italy, Australia and many others transformed the AIIB in a Eurasian Bank. With its newest members from Africa and the Americas, Ethiopia, Sudan, Venezuela, Peru, Canada, to only mention a few, the AIIB declared its intention to become a global bank.