Apolitical AIIB a partnership for inclusive development

The world has witnessed two major changes or tremors over the past year. First, President Trump generated shockwaves by announcing an all-out trade war. This has shaken the global economy, which was already facing serious problems, including debt, slow growth, climate change, and inequality. Second, the USA relentlessly pursued the Gulf Plan to revive and strengthen its economy. President Trump made his first trip to the Gulf countries to convince them to approve the Gulf-Plan. This marks a significant event in the modern economic and diplomatic history. The US, once the architect and financier of the Marshall Plan, was seeking investments and plans from Saudi Arabia, Qatar, and the UAE. This implies that traditional sources of investment have been exhausted, and the world is looking for alternative sources of funding. In this context, the Asian Infrastructure Investment Bank (AIIB) has gained immense importance over the last few years. It is a relatively young multilateral financial and development institution, yet it has established a strong presence due to its clear vision, well-defined goals, and effective performance.

The AIIB is an alternative investment avenue proposed by President Xi in 2013 and launched in 2014. The AIIB was established with the vision of assisting Asia in building a prosperous future by “Building Infrastructure for Tomorrow,” adopting principles of sustainability, innovation, and prosperity for its people. The organization has undertaken numerous initiatives to achieve these objectives, including its Sustainable Cities Strategy and Sustainable Energy for Tomorrow, among others. AIIB is also helping countries explore innovative solutions and technology for building future infrastructure, which can generate economic activity and enhance connectivity by adhering to the principles of sustainable development.

Since its launch, China, under President Xi’s leadership, has ensured that the AIIB develops into a modern, innovative, inclusive, goal-oriented, and rule-based institution. President Xi envisioned that the AIIB must discourage geopolitics, a my-interest-first mentality, and mainstream economic rationales, while prioritizing sustainability principles. The AIIB must focus on bridging the investment gap, as Asia is facing a growing investment deficit exacerbated by climate change. Consequently, the global community, particularly developing and least developed countries, views the AIIB as a fair, inclusive, and timely initiative that can help them meet their investment requirements.

The analysis of past years indicates that from the outset, the AIIB has been committed to the prescribed vision and goals, working to bridge the investment gap and meet the needs of its member countries. It is continuously expanding its efforts across multiple sectors by providing funding to governments and private entities. The list of projects is extensive and diverse. It has financed 317 projects and programs, with many more currently under approval. As of 2024, it has disbursed US$60.59 billion for various interventions worldwide. Additionally, the AIIB is focused on building the capacity of its members to access funds, having extended US$30.14 million for project preparations.

The AIIB also contributed to the fight against COVID-19. It established a Crisis Recovery Facility to expedite the funding process. Originally, it decided to provide US$13 billion by 2022. However, due to demand, the availability of funds was later increased to US$20 billion. A special window was created for supporting productive expenditures in the fight against COVID-19. It was deemed necessary to build resilience and promote economic activities. Data suggest that, as of December 2023, the AIIB has approved 68 projects totaling US$18.48 billion. There was a special focus on the needs of developing and low-income countries, which account for 65% of the total disbursement of the approved projects.

Simultaneously, the AIIB has remained focused on the future needs of the planet and infrastructure. It promoted infrastructure that aligns with the requirements of the Fourth Industrial Revolution.

At the same time, AIIB is working to establish partnerships with multilateral institutions and organizations, including the World Bank, the Islamic Development Bank, the Asian Development Bank, the New Development Bank, the European Bank for Reconstruction and Development (EBRD), the African Development Bank, the Development Bank of Latin America, the United Nations (UN), the G-20, China Exim Bank, China International Development Cooperation Agency, IFAD, and others.

However, AIIB remained committed to President Xi’s vision of being an apolitical organization that operates independently. This commitment is evident in its decision-making process and how it disburses funds. For instance, India is the largest borrower from AIIB, having borrowed approximately US$9.7 billion as of 2024. Additionally, AIIB has committed US$2 billion to the Philippines. This funding occurs despite the ongoing border conflict between China and India, and the Philippines has also developed significant differences with China.

These factors have contributed to the growth and expansion of the AIIB. It began with a few members, and as of 2024, the AIIB has 110 members (42 in Asia, 26 in Europe, 22 in Africa, 10 in Oceania, 8 in South America, and 2 in North America). The AIIB initially focused on Asia and the Pacific, but its commitment to development and inclusiveness has allowed it to extend its work to other continents. The AIIB is also active in Africa and Latin America, with a US$100 million project in Brazil, among others. It has also invested in Sub-Saharan Africa. The AIIB concentrates explicitly on projects that enhance regional connectivity, such as the joint ASEAN 3-year program aimed at improving connectivity within ASEAN.

Based on the above discussion, we can draw two conclusions. First, the AIIB is working to bridge the investment gap by adhering to the principles of sustainable production and consumption, creating opportunities for livelihoods and wealth generation, and enhancing connectivity through the development of eco-friendly infrastructure. Second, it aims to bring new vigor to regional cooperation, promote the idea of partnership, and achieve win-win cooperation by building partnerships with other multilateral, regional, and bilateral institutions.

However, many experts believe that the AIIB was created to address the exploitative attitudes and influence of Western countries and institutions, such as the IMF and the World Bank. Because the West openly dictated these institutions to enforce its policies and compel nations to comply. The Global South grew weary of this system and called for reforms to these institutions, advocating for voting rights to be re-calculated according to the agreed-upon formula: a weighted average of GDP (.5), openness (.3), economic variability (.15), and international reserves (.05). The West delayed necessary reforms at the IMF, World Bank, and other Western-dominated institutions, instead of allowing legitimate involvement and roles in managing these organizations. China, as an emerging power and a leading voice in the Global South, has repeatedly urged the West to listen to the concerns of the Global South and undertake urgent reform of these institutions to address challenges, but to no avail. Thus, rather than engage in conflict with the West, China chose a peaceful alternative and established the AIIB.

In conclusion, the AIIB is the first non-Western institution that is free from the influence of Western countries and systems. It is free from political interference and promotes the rule of law. It also indicates the emergence of a new China, which is ready to play a leading and influential role on the global level. It further demonstrates China’s dedication to realizing the dream of a shared future and prosperity for all.