Asian Infra Investment Bank launched to end US-led West’s hegemony

The China-backed Asian Infrastructure Investment Bank, in which India is the second largest shareholder, was inaugurated here on Saturday by President Xi Jinping who said it would boost infrastructure development in Asia and contribute to a fairer global economic governance. 

“This is a historical moment,” Xi said addressing the opening ceremony of the bank, which along with the BRICS’ New Development Bank (NDB) is expected to expand infrastructure financing, rivalling the World Bank and Asian Development Bank.

The Asian Infrastructure Investment Bank (AIIB), which has 57 founding members, will be based in Beijing. The US and Japan, which play dominant role in World Bank, IMF and the Asian Development Bank (ADB), have stayed out expressing reservations about the institution’s openness.

An Indian delegation headed by Additional Secretary (Finance) Dinesh Sharma took part in Saturday’s opening ceremony, addressed separately by Xi and China’s Premier Li Keqiang. With an authorised capital of $100 billion and subscribed capital of $50 billion, the AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.

China is the largest shareholder with 26.06 per cent voting shares. India is the second largest shareholder with 7.5 per cent followed by Russia (5.93 per cent) and Germany with 4.5 per cent. 

India, whose total capital subscription amounts to $8.37 billion, has paid first instalment of $334.70 million to the paid-in capital stock of the bank. Twenty per cent of the subscription is to be paid in five equal instalments.

By virtue of its 7.5 per cent, India hopes to get elected to the 12-member board of directors. A secret ballot to elect the directors was held on Saturday, the results of which would be announced on Sunday.