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Member states reach consensus on AIIB charter
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 On 22 May, Shi Yaobin, Chinese Vice Minister of Finance and permanent chair of the Chief Negotiator’s Meeting announced that the 57 founding member countries had finalized Articles of Agreement (AoA) for the Asian Infrastructure Investment Bank (AIIB), a China-led multilateral development bank. It took three days for the participants to hammer out an agreement, which comes comes only eighteen months after President Xi first raised the idea of the regional bank focused on infrastructure at APEC in October 2013. The bank is expected to extend its first loan by the end of the year.

 

AIIB intends to leverage Chinese experience in infrastructure development and capital to address a yawning gap in Asian infrastructure demand. While the World Bank spent $24.2 billion on overall infrastructure in 2014, and the Asian Development Bank (ADB) spent $21 billion across all sectors in the same year, the ADB estimates that there is still a need for around $800 billion in annual funding for Asian infrastructure. Even though the authorized capital objective of $100 billion will still fall short regional funding needs, the possibility for coordinated spending between the AIIB, the $40 billion New Silk Road Infrastructure fund, and the New Development Bank (formerly BRICS Development Bank) with an additional capital objective of S100 billion, could well have a significant impact on regional infrastructure spending.

 

*  AIIB Memorandum of Understanding signed by 21 countries in October, 2014

*  Signing ceremony to be held in late June

*  MOU specified an initial subscribed capital of $50 billion, with a capital objective of $100 billion

*  57 founding member countries

*  China controls the largest voting share, around 36%

*  The United States and Japan have not joined the AIIB as first round members

*  Total infrastructure investment demand in Asia is estimated at $8.22 trillion for the decade from 2010