Russia anticipates becoming a key manager of China’s proposed Asian Infrastructure Investment Bank (AIIB), a Moscow representative said in Beijing Saturday. China’s alternative to the Asian Development Bank, International Monetary Fund and World Bank would seek to finance much-needed Asian infrastructure projects, an effort Japan and the U.S. both view as a challenge to their influence in the region.
“Russia would at least be among AIIB’s top five countries, so it would qualify for an appropriate voting share and a relevant share of the bank’s management,” Andrey Denisov, the country’s first deputy foreign minister, told its official RIA Novosti news agency. Russia is one of 57 nations that have signed on to become prospective founding members of the Beijing-based $100-billion development bank that was launched last October.
Several European countries, Brazil, Australia and almost all Southeast Asian nations are bidding for founding-member status. While Russia is facing Western sanctions over its annexation of Crimea and disputed support of pro-Russian separatists in Ukraine, Beijing and Moscow have been forming closer ties.
Representative of the AIIB’s prospective founding members will converge in Beijing Monday for a signing ceremony centered on the bank’s legal framework, which will lay down the rules, including members’ voting powers and its decision-making processes. “If everything goes to plan, the AIIB will start operation by the end of 2015,” Chen Fengying, a researcher with the China Institute of Contemporary International Relations, told the country’s official Xinhua News Agency.
China has agreed to eschew veto power over AIIB decisions in an attempt to win support. This week, Australia’s Treasurer Joe Hockey said the AIIB will offer his country new opportunities. “We are absolutely satisfied that the governance arrangements now in place will ensure there is appropriate transparency and accountability in the bank,” Hockey told Sky News.
The AIIB is on track to hit its initial target of $100 billion in member contributions before the end of the year. According to the Manila, Philippines-based Asian Development Bank (ADB), Asia will need $8.22 trillion worth of infrastructure investments in the current decade to address the region’s fast population growth and its high pace of urbanization.
“We need a lot of funding from overseas,” S.D. Darmono, head of the Indonesian industrial estate developer Jababeka, told CNBC Thursday.
The AIIB would compete in some ways with the ADB, which is largely controlled by Japan and European members, as well as with the International Monetary Fund and World Bank, both headquartered in Washington. But officials at the other development banks have welcomed the AIIB. The U.S. government adopted a different approach and openly lobbied to prevent its allies from joining. It failed.