Beijing, June 29 (IANS) In a historic move, representatives of 57 founding countries, including India, signed an agreement on Monday for the China-led $100 billion multilateral Asian Infrastructure Investment Bank (AIIB) that paves the way for the bank’s operation later this year.
China, India and Russia are the three largest shareholders, taking a 30.34 percent, 8.52 percent and 6.66 percent stake, respectively. Their voting shares are calculated at 26.06 percent, 7.5 percent and 5.92 percent, Xinhua reported.
The signing of the 60-article AIIB agreement is a historic step forward in building the China-initiated multilateral bank, said Chinese President Xi Jinping.
“The signing of the document reveals the commitment of the parties involved in the founding of the AIIB, as well as their solidarity, cooperation, openness, inclusiveness and quest for common development,” Xi told representatives of the 57 countries.
The Beijing-headquartered bank will start operation at the end of the year under two preconditions: at least 10 prospective members sign the agreement, and the initial subscribed capital is no less than 50 percent of the authorised capital.
The bank will have authorised capital of $100 billion and Asian and Oceanian countries will contribute up to 75 percent of the total capital.
Each member will be allocated a share of quota based on their economic size.
With a principal mission to fund infrastructure projects, the bank will help meet the massive capital requirements of infrastructure projects worth trillions of dollars in the Asia-Pacific.
Leaders of the International Monetary Fund (IMF), World Bank and other leading global lenders have on many occasions expressed willingness to collaborate with the new bank to fill Asia’s infrastructure gap.
“We view the AIIB as an important new partner that shares a common goal: ending extreme poverty. The AIIB will join us and other development banks in addressing the huge infrastructure needs that are critical to ending poverty, reducing inequalities, and boosting shared prosperity,” World Bank Group President Jim Yong Kim said in a statement after the signing ceremony.
The formation of the new multilateral institution clearly illustrates Asia’s great need to improve its underdeveloped infrastructure as well as the common aspiration of its countries to explore further growth potential in the region.
“As long as all parties stick to the spirit of multilateral cooperation, we can make the AIIB a new platform that features openness, inclusiveness and mutual benefits, and contribute to Asian infrastructure development,” President Xi noted.
The new bank strives to follow international rules in its operation, policymaking and management to ensure efficiency and transparency.
“We will continue to support existing multilateral banks, and by proposing the AIIB, we also hope to promote current institutions to better meet the requirement of their member countries and global economic system changes,” Xi pointed out.
The China-proposed AIIB aims at solving practical issues of the region, he said, adding the AIIB will complement current global financial institutions.
“China will make joint efforts with various founding countries to build a professional, efficient and clean multilateral bank, and jointly contribute to Asia and world economic prosperity,” Xi emphasised.
The AIIB was proposed by President Xi in October 2013.
A year later, 21 Asian nations, including China, India, Malaysia, Pakistan and Singapore, signed an agreement to establish the bank.
While stating that the US will not join the AIIB at present, US President Barack Obama said the country looked forward to collaborating with the new development bank “just like we do with the Asia Development Bank (ADB) and with the World Bank” in April.
Statistics from the ADB show that between 2010 and 2020, around $8 trillion in investment will be needed in the Asia-Pacific region to improve infrastructure.