The establishment of Asian Infrastructure Investment Bank (AIIB) may be a matter of concern for the World Bank (WB) and Asian Development Bank (ADB) as it would limit their leverage and monopoly in infrastructure sector, according to economists.
Economist and former Senator Professor Khurshid Ahmed stated that the establishment of AIIB was a very positive development in the changing global economic scenario. He added that AIIB would provide an alternative mode of financing and resources to Asian countries and trigger a competition between AIIB and WB/ADB which might have a sobering impact on WB and ADB by limiting their leverage. However, Khurshid Ahmed regretted that Pakistan's role would be very limited as a result of a very small share in the bank.
Advisor to Chief Minsiter Balochistan Qaiser Bangali also termed the AIIB a positive development for Asian and African countries but regretted that Pakistan might not be able to take full benefit from it due to poor project preparation and submission. He said that the concept of infrastructure development is almost non existent here because the focus is now on investment in stock exchange and real estate. He suggested that the country strengthen its project making system to qualify for funding.
Pakistan has signed the articles of agreement (AoA) and become one of 57 founding members of AIIB Monday, according to a statement issued by Finance Ministry with a Beijing dateline. Ishaq Dar represented Pakistan at the signing ceremony that was also attended by the delegates of the other member countries. Dar also met President Xi Jinping of China following the signing of that document.
The bank, which has 57 prospective founding members, will be based in Beijing. The Bank aims to narrow down Asia's infrastructure gaps by providing financing for infrastructure projects in the region. An official of Finance Ministry stated that the Finance Minister also attended an Inter-ministerial meeting which discussed important financial and administrative matters about the future working of AIIB.
The statement added that earlier in May this year, the prospective members of the bank after deliberations had finalised the articles of agreement for the AIIB as a result of a three-day policy meeting. It is believed that the bank would be operational by the end of this year. Pakistan has been actively involved throughout in the consultations at all levels and after intensive consultations amongst the members the AoA signing was made possible in a short span of nearly eight months since an MoU on establishment of the AIIB was signed in October 2014. The Finance Minister stated that Bank will provide an important platform in converting available savings in the region into investment to help regional economies achieve sustainable and rapid development and thereby contribute to the world economy.
He said that Pakistan hoped to draw financing support for communications and energy infrastructure projects including projects for construction of roads, dams, power generation. The Finance Minister Ishaq Dar said that in Asia, the China-Pakistan Economic Corridor (CPEC) mega project which involves a cluster of communications infrastructure and power generation projects would provide an integrating platform for over three billion people in Central, West and South Asia, the Middle East and Africa Regions. The increase in financial flows, investment, trade, digitalisation, etc, would bring peace and prosperity to the region, enhance the competitiveness of the economies of these countries, contribute to reducing regional disparities and social inequality, and improve life expectancy and quality of life in the country and in the region, he added.
The Minister during his meeting with President Xi Jinping extended warm wishes and regards of Pakistan's Prime Minister Nawaz Sharif and President Mamnoon Hussain and congratulated him on the wonderful idea of AIIB. The Minister led a Pakistan's delegation to the Ministerial Meeting. The delegation included Ambassador of Pakistan to China, Masood Khalid and also the Economic Minister at the Embassy.
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