China’s push to create the Asian Infrastructure Investment Bank (AIIB) generated intense speculation that Beijing was challenging the existing multilateral architecture. With the AIIB’s first annual meeting just weeks away, what does the early evidence suggest about the course it will take? Ankit Panda argues that the Bank’s first steps appear aimed at complementing rather than supplanting existing institutions.
A year and a few weeks ago, the AIIB’s 57 founding members finalized its charter; in the final days of 2015, the members ratified the bank’s Articles of Agreement. Finally, early in the new year, the AIIB opened its doors for business. Now, just over three months into its operations, the AIIB has decided on its first projects. As I’d briefly discussed in April, the AIIB’s first projects have demonstrated that concerns a year ago in Washington and Tokyo may have been overstated. For now, the bank appears to be pursuing a modest and complementary approach in selecting its projects.
One of the bank’s first confirmed projects, the construction of a 64 kilometer stretch of a highway in Pakistan, demonstrates this. The AIIB will partner with the ADB, as Reuters reported last week. “I am delighted to take a further step forward in our partnership with ADB,” AIIB President Jin Liqun said in a statement posted to the AIIB’s website. Per the memorandum of understanding between the two banks, the AIIB will work with the ADB to cooperate on the highway, which will connect Shorkot to Khanewal in Pakistan’s Punjab province. The AIIB is also separately planning on co-financing projects with the World Bank and, on Monday, formally announced another co-financed project, this time with the European Bank for Reconstruction and Development, to improve roads along the “Tajikistan section of the Central Asia Regional Economic Cooperation Corridor, [near the border with Uzbekistan].”