Asian Infrastructure Investment Bank
Bangladesh to sign deal on June 29
JAGARAN CHAKMA
On June 29 in Beijing, Bangladesh will ink the Articles of Agreement (AoA) of Asian Infrastructure Investment Bank (AIIB). This will provide the country with access to the huge investments needed for infrastructure development.
The report on AoA was finalised on May 22 in Singapore.
As a founding member of AIIB, Bangladesh would have to pay its share of $700 million, which is 0.7 per cent, to join the bank. It would have an approved capital estimated to be at $100 billion, according to sources at the Economic Relations Division (ERD).
Among South Asian nations, India holds the largest share of 8.52 per cent, a finance official said.
Being the sponsoring country Chinas share is 30.34 per cent, with South Korea and Indonesia having 3.80 and 3.42 per cent stakes respectively.
Lou Jiwei, Finance Minister of China, has invited Bangladesh Finance Minister AMA Muhith to attend the signing ceremony of the AoA of AIIB in Beijing, as well as the Special Ministerial Meeting (SMM) that will follow it.
Bangladesh will also attend the pre-meeting that will be held in the afternoon on June 28. It is a working-level meeting that will prepare the ground for the AoA signing ceremony and the SMM.
The AIIB, initiated by China, will help meet Asias enormous infrastructure needs that are not being met by the current international institutional finance arrangements. The plan for forming the bank was announced by Chinese President Xi Jinping and Premier Li Keqiang in October 2013.
The Chinese Finance Minister Lou expects active participation of all the 57 founding members of AIIB.
Former adviser to the caretaker government, Dr ABM Mirza Azizul Islam, told The Independent that the AIIB is good news for infrastructure-hungry nations like Bangladesh that need investment for their growth and development.
He also said that the government can borrow fund from the AIIB to supplement what it gets from the Asian Development Bank (ADB), the World Bank and the Islamic Development Bank (IDB).
However, Azizul Islam warned that all this borrowed money will not bear fruit if it is not utilised properly.
While borrowing from the AIIB too, the government will have to be careful about the things like terms and conditions of the loan, grace period and repayment period, he said.
AIIB was initiated by the new Chinese leadership, with the aim of creating a more equal and balanced development model in Asia.
According to a report by the ADB, in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate. Existing institutions like the ADB have neither the capital nor the expertise to cater to these needs. On the other hand, China has the money and the experience from its remarkable infrastructure development path. Drawing from Chinas experience, the bank will help in providing the required infrastructure for the Asian Century.
The first proposed projects of the bank are the New Silk Road and the Maritime Silk Road (MSR). Both the projects are oriented towards developing infrastructure and connectivity in the region. These projects will benefit not just China but all the countries along these roads, as well as the entire region.
Asian economies are rapidly expanding and are expected to become more complex and interconnected. Such initiatives will help to sustain their pace of development.
