I hope you read my earlier article about Asian Infrastructure Investment Bank (AIIB) which is supposed to be as big as Asian Development Bank and is objected by the largest economy of the world as potentially not being managed as professionally as some of the western based financial institutions. Read here: AIIB: Great initiative and poised to ‘grow’ infrastructure ASIA Perhaps a much better question to ask would be how AIIB would benefit ASIA. Well, first of all, this IS an ASIAN initiative led by China which has the largest foreign reserves in the world. In fact, China’s renminbi has also been announced as another world reserve currency too. Read here: China’s renminbi is now IMF’s reserve currency Technically, renminbi is on par as US$ or Yen or Euro where IMF is concerned.
Well, as per a few articles online past few days, the president-elect of AIIB, Jin Liqun said that he expects the bank to start operations in second quarter of 2016 and it will lend between US$10bil-US$15bil (RM42.3bil-RM63.5bil) a year for the first five or six years. The US$ will be the operatin currency of the bank but IF there are requests from the borrower countries, it will consider other currencies including the Chinese Yuan. (renminbi) Jin said AIIB is also talking to other instituions including the World Bank and the Asian Development Bank, on co-financing. This would allow it to quickly start. Another 30 countries are waiting in line for membership which meant the total capital would be increased further.
The speed in which AIIB was set up is unprecedented. It was only proposed by China’s President Xi Jinping less than two years ago. Yes, there were many murmurs and even a strong opposition from the US but when membership started, nearly ALL of the usual US supporters including Australia, Britain, German, Italy, the Philippines and South Korea joined. Nowadays the argument is that AIIB is a tool of Beijing to increase its influence. I think this argument is flawed because I am not too sure if countries like Australia, Britain or Germany likes to be ‘controlled’ by China? Get real, these are still western developed economies and none would be too happy to be dominated by any ASIAN country, even if it’s China. Happy reading and following AIIB’s progress.
written on 2 Dec 2015
Next suggested article: China, the new ‘World Bank?’