AIIB & The Changing World Order

Jun, 23, 2018

[pib] Third AIIB Annual Meeting 2018, Mumbai


From UPSC perspective, the following things are important:

Prelims level: AIIB, Asian Infrastructure Forum

Mains level: Not Much


3rd Annual Meeting of AIIB

  1. The Department of Economic Affairs and the Asian Infrastructure Investment Bank (AIIB) will jointly host the third Annual Meeting of the AIIB in Mumbai.
  2. The theme for this year’s meeting is “Mobilizing Finance for Infrastructure: Innovation and Collaboration” that will see leaders from varied organizations and levels of government to share ideas and experiences for creating a sustainable future through sound infrastructure investment.

Asian Infrastructure Forum

  1. This year will also see the launch of the inaugural Asian Infrastructure Forum, which will gather infrastructure practitioners in a practical and project-driven discourse
  2. It is focused on matching innovative finance to critical infrastructure needs.

India Infrastructure Expo 2018

  1. The Department of Economic Affairs, in partnership with the Federation of Indian Chambers of Commerce & Industry (FICCI), is also organising an exhibition India Infrastructure Expo 2018.
  2. The objective of the exhibition is to offer companies from the public and private sector to showcase their latest solutions, technologies and offerings in the realm of infrastructure project development and delivery.


Asian Infrastructure Investment Bank (AIIB)

  1. The AIIB is a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region.
  2. It was proposed as an initiative by the government of China in 2013 and came into existence in 2014.
  3. The capital of the bank is $100 billion, equivalent to 2⁄3 of the capital of the Asian Development Bank and about half that of the World Bank.
  4. Recently AIIB extended USD 1.2 bn loan for infra projects in India.
  5. The fund will invest in six projects, including $500 million in the Mumbai Metro and $455 million in rural roads in Andhra Pradesh.
  6. This also includes $200 million to the National Investment and Infrastructure Fund.
Apr, 03, 2018

The myth of rule-making in the international order


Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: India’s aspirations to be a global rule maker and associated constraints


Emerging superpowers being excluded

  1. China and India are being excluded from institutions in the international order
  2. Exclusion ostensibly prevents them from becoming rule makers that presumably would allow them to make or create rules
  3. These rules would help address problems like climate change or nuclear proliferation that no one state can address alone

Issues associated with noninclusion

  1. US and Western countries that lead the international order are not completely open to meaningfully sharing power with rising powers like India
  • The international order was constructed following World War II to manage geopolitical exigencies wrought by the Cold War
  • Over time, international organizations took on different priorities, particularly facilitating liberalization and the opening up of global markets
  • Trade agreements were used to open new markets for American goods
  • Negotiations on a number of agreements from the 1980s on issues like global warming, disarmament and tobacco control were marked by American and, occasionally, European reticence to make rules globally applicable
  • The international order has been liberal but only for a small minority in the West

2. It is difficult for any one country, even the US, to function as a rule maker

  • Being a rule maker is distinct from stitching together ad hoc coalitions to tackle problems
  • Rule makers purportedly work within multilateral fora to address existing trans-boundary problems
  • Negotiating international rules in such settings entail dealing with over 100 different national agendas and as many interpretations on how they perceive a policy problem should be addressed

3. It may not be in India’s interest, now, to seek or acquire greater responsibilities in the international order

  • Leadership is an onerous task
  • Issues like intervention, humanitarian crises, and nuclear proliferation require nifty diplomatic coalitions to address
  • India’s overriding focus on securing its periphery and improving its growth trajectory serve as constraints to higher ambitions in the international order
  • India’s economic interests conflict with or complicate policy choices

Way forward

  1. Leading while trying to sustain growth is complex and not always prudent
  2. The very real constraints that accompany development offer India a political strategy to eschew burden-sharing responsibilities until they can be balanced with domestic commitments
  3. It’s time to take a step back on pontificating on the selectively liberal international order and whether it can accommodate rising powers like India into the mix
Nov, 30, 2016

Indian concerns about possible AIIB funding for CPEC

  1. India has strategic concerns regarding CPEC that covers areas including Pakistan-occupied-Kashmir
  2. CPEC is the so-called ‘flagship’ project of China’s One-Belt-One-Road (OBOR) initiative, aimed at developing infrastructure in more than 60 countries
  3. OBOR is among those that will get AIIB funding
  4. The Bank’s priority areas in Asia are to help develop sustainable infrastructure, improve transport and energy connectivity and mobilise private sector capital into infrastructure


Make a note of AIIB and OBOR. Find out the headquarters of AIIB and the voting share of India.

Sep, 01, 2016

Canada to apply to join China-backed AIIB: president of AIIB

  1. Canada will submit its application to join the AIIB by the end of September 2016
  2. AIIB: An international financial institution head quartered in Beijing, China
Jun, 27, 2016

AIIB to help fund urban development in India

  1. India is identifying projects worth US$ 2-3 billion that could be funded by the Asian Infrastructure Investment Bank (AIIB)
  2. The projects were in the areas of urban development including smart cities, urban transport, energy, inland waterways and water supply
  3. AIIB represents an additional financing window dedicated to infrastructure projects and meeting the financing gap
Feb, 02, 2016

‘Indian likely to become CFO of AIIB’


  1. India is likely to bag the post of Chief Financial Officer (CFO) in the newly launched Asian Infrastructure Investment Bank (AIIB).
  2. The multilateral bank, whose formation was steered by China in order to boost infrastructure development in Asia.
  3. The newly appointed President of the AIIB — will be from Germany, India, South Korea, Britain and Indonesia.
  4. The Vice-President from Germany would serve as the Chief Operating Officer, while his peer from India would become the bank’s first CFO.
  5. Analysts say that the Chinese have made a decision to run the bank according to international best practices, which include tapping into the experience of European bankers.
Jan, 19, 2016

India elected to board of directors of AIIB

  1. Dinesh Sharma, Additional Secretary of Ministry of Finance has been elected to the 12-member board through a secret ballot.
  2. AIIBB has authorised capital of $ 100 billion and subscribed capital of $ 50 billion.
  3. AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.
  4. China is the largest shareholder with 26.06% voting shares followed by India, the second-largest with 7.5%; Russia 5.93% and Germany 4.5%.
Jan, 19, 2016

AIIB to have compliance unit

  1. China has committed to hold the AIIB to high standards of governance and transparency.
  2. A special compliance-and-integrity unit will exercise oversight over the management and report directly to the board.
  3. There’ll be division of power and responsibility between the board and management
  4. AIIB plans to raise capital in currencies including US dollars, euros and the yuan, while making loans in American dollars.
Jan, 19, 2016

Xi Jinping says AIIB to boost infrastructure investment in Asia

Xi says AIIB will provide impetus for economic growth in Asia and the rest of world.

  1. China-led Asian Infrastructure Investment Bank (AIIB) was formally opened by the Chinese President Xi Jinping in Beijing.
  2. The bank expects to lend $10 billion to $15 billion a year for the first 5 years of its operations, beginning in the second quarter of 2016.
  3. Despite opposition from Washington, U.S. allies including Australia, Britain, German, Italy have agreed to join the AIIB in recognition of China’s growing economic clout.
Nov, 05, 2015

China parliament ratifies $100 bn AIIB

Asian Infrastructure Investment Bank (AIIB) agreement, which establishes the legal framework for the bank.

  1. China being the largest shareholder, ratification is a significant step closer to the AIIB’s formal establishment slated for the end of 2015.
  2. With an authorized capital of $100 billion, the AIIB finance infrastructure projects like construction of roads, railways, and airports in Asia-Pacific Region.
  3. BRICS members China, India and Russia are the three largest shareholders.
  4. With a voting share of 26.06 per cent, 7.5 per cent and 5.92 per cent, respectively.
  5. Among AIIB’s 57 prospective founding members, 54 had signed the agreement as of last month.
Sep, 03, 2015

India must encourage entry of Renminbi into IMF’s SDR. Why?

India has some things to learn from China.

India should seek to emulate the Chinese model of development that is based on exports and building reserves”.

  1. India’s strategic objective should be to strengthen multilateral institutions and use them to pressure China.
  2. In particular, he added, India should try to make the Asian Infrastructure Bank as universal as possible – especially convincing the US to join – to counter China’s regional interests through the bank.
  3. He termed the US’ refusal to join the Bank a “huge mistake”.
  4. The Chinese transition, he said, was one of a huge shifting of resources from manufacturing to services.
Sep, 03, 2015

Founding members ink agreement on AIIB

  1. India along with 49 Prospective Founding Members (PFMs) on Monday signed the Articles of Agreement for the formation of the Asian Infrastructure Investment Bank (AIIB).
  2. The AIIB is expected to focus on the infrastructure development in Asia, and unlike the existing International Monetary Fund (IMF) and World Bank, it won’t restrict lending on political considerations.
  3. According to an AIIB press statement, the Bank, will be headquartered in Beijing, and will have an initial authorised capital stock of $100 billion.

Reflecting regional character of the Bank, its regional members will be the majority shareholders, holding approximately 75 percent of shares

Jul, 02, 2015

[op-ed snap] AIIB: A new multilateral institution

  1. AIIB took shape with 50 members, including Australia, India, Russia and the United Kingdom and the remaining 7 are likely to join by the end of the year.
  2. China will be the largest shareholder (at 30.34%), followed by India (8.52%) and Russia (6.66%).
  3. AIIB is a culmination of China’s concerns that the emerging economies were not being given an adequate say in institutions such as IMF and WB.
  4. With ‘Belt and Road’ project close to her heart, AIIB is likely to invest in projects in China’s Asian neighbourhood which is suffering from a massive infrastructure funding gap.
  5. India’s participation in AIIB indicates mature balancing act to suit its interests – to engage with the West, at the same time exploring options with new financial institutions.
Jun, 30, 2015

50 nations in, AIIB takes shape

  1. The AIIB is expected to focus on infrastructure development in Asia, and unlike the existing IMF and World Bank, is unlikely to restrict lending on political considerations.
  2. Bank will be headquartered in Beijing, and will have an initial authorised capital stock of $100 billion.India to have 7.5 % voting share, and China 26 %.
  3. India is second largest shareholder with 8.52% stake, after China which holds 30.34% share.
Jun, 27, 2015

Australia to join China-led AIIB

  1. Australia would join the new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member.
  2. AIIB will work closely with the private sector, paving the way for Australian businesses to take advantage of the growth in infrastructure in the region.
  3. AIIB has still been shunned by the United States and Japan, the world’s largest and 3rd largest economies.
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