Articles of association: Framework for China-led AIIB signed

Representatives of 57 founding members participating including Ishaq Dar

ISLAMABAD:

The signing ceremony of the articles of association for setting up China-led Asian Infrastructure Investment Bank (AIIB) began in Beijing on Monday.

Representatives of 57 founding member countries of the bank are participating in the ceremony, including Finance Minister Ishaq Dar.

An inter-ministerial meeting will also be held in Beijing today (Tuesday) to discuss important financial and administrative matters about the future working of AIIB.

During his visit, the finance minister will also hold meetings with senior Chinese leadership and discuss different avenues of bilateral economic cooperation, including the China-Pakistan Economic Corridor.

“The CPEC involves a cluster of communications, infrastructure and power generation projects and will provide an integrating platform for over 3 billion people in Central, West and South Asia, the Middle East and Africa regions,” he said.

He also met Chinese President Xi Jinping following the signing of the document.

Pakistan has been actively involved in the consultations at all levels and after intensive consultations amongst the members, the articles of association signing was made possible in a short span of nearly eight months since the MoU on the establishment of the AIIB was signed in October 2014.

“We believe that the bank will be an important platform to convert the abundant savings available in the region into investment to help regional economies achieve sustainable and rapid development,” said Dar, adding that Pakistan hoped to draw financial support for communications and energy infrastructure projects, including projects for construction of roads and dams.

The AIIB has been viewed by some as a rival to the World Bank and Asian Development Bank, and the United States and Japan have notably declined to join.

Australia became the first country to sign the document. Seven more are expected to do so by the end of the year.

Beijing will be by far the largest AIIB shareholder at about 30 percent, followed by India at 8.4 percent and Russia on 6.5 percent. Among non-Asian participants, Germany is the largest shareholder with 4.5 percent, followed by France with 3.4 percent and Brazil on 3.2 percent.

The AIIB is expected to go into operation later this year with its headquarters in Beijing. All financial terms in the agreement are in US dollars and the bank’s working language will be English.

Washington sought to dissuade its allies from taking part but European countries including Britain, France and Germany have rushed to sign up as they seek to bolster ties with the world’s second-largest economy.

There are some concerns over transparency of the lender, which will fund infrastructure in Asia, and worries that Beijing will use it to push its own geopolitical and economic interests. Supporters, however, say fears over undue Chinese influence are overblown, and that the participation by more than 50 countries will dilute Beijing’s power.

The articles of association specify that the bank’s president must come from the Asian region and will serve a maximum of two consecutive five-year terms.

Chinese Vice Minister for Finance Shi Yaobin said that China will “recommend a strong and powerful candidate” for the position. 

Published in The Express Tribune, June 30^th,  2015.

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