Bangladesh, one of the founder members of Asian Infrastructure Investment Bank (AIIB), has sought loans for its infrastructure development from this new bank.
AIIB, considered a World Bank of South Asia, came into being on December 25 last year under the auspices of China to meet up requirements of huge financial assistances to develop rail and road links and other infrastructural development in the Asia-Pacific region. Its formal journey started since January 16 this year with 57 countries from Asia and Europe as sponsor members.
The Beijing-based bank will invest in various sectors such as energy, transportation, urban construction and logistics, education and healthcare.
AIIB will prioritise financing the projects relating to regional connectivity, according to its officials.
Among the 57 nations, many countries are US allies like the United Kingdom and Germany. The only important US ally to stay away from the AIIB is Japan. China is funding US$50 billion of AIIB's $100 billion paid-up capital, the rest is being funded by 56 other member-countries.
Despite opposition from Washington, major US allies such as Australia, Britain, Germany, Italy and Asian countries China, India, Russia, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan, and Vietnam and South Korea have joined as AIIB's founding members.
While addressing the opening ceremony of the bank, Chinese President Xi Jinping said, "This is a historical moment as this newly floated financial institution will expand infrastructure financing, rivalling World Bank and Asian Development Bank."
The 'World Bank of South Asia' gets Chinese Finance Minister Lou Jiwei as its first Chairman and former Finance Minister Jin Liqun the President.
China, India and Russia are the three largest shareholders, taking 30.34 per cent, 8.52 per cent and 6.66 per cent stake respectively in the newly formed bank. By dint of capital investment the members' voting shares will be determined. Bangladesh will be able to exercise 9635 votes, which is 0.83 per cent of the total polling rights. Among the South Asian nations, India holds the largest share of 8.52 per cent. Being the sponsor country China's share is 30.34 per cent, with South Korea and Indonesia having 3.80 and 3.42 per cent stakes respectively.
Based on share holding, India is expected to get the vice presidency.
Bangladesh expects a long time funding for major infrastructure projects from AIIB, says Finance Minister AMA Muhith. "We are constructing the Padma Bridge on our own resources. But we need many such projects to boost our infrastructure. So we need AIIB funding."
The Finance Minister also pointed out that Bangladesh is a role model for the developing world, as it has posted 6 per cent GDP growth over the past few years despite a global recession.
He is scheduled to hold a one-to-one meeting with AIIB President-designate Jin Liqun. "But we do not want to stop here, we have a long way to go. In the last seven years, the government's priority was power, energy and infrastructure."
But Muhith admitted that sectors like education, health and employment were deprived to some extent. "So we will now focus on education, health and employment. Our goal is to do things that are sustainable," he said.
Dr AB Mirza Azizul Islam, former finance adviser to a caretaker government, told the Daily Observer, " If AIIB's rate of interest is low and conditions are easier, then there may be an alternative to WB and ADB funds."
He, however, does not see AIIB as a parallel to them. "I think AIIB is an alternative source of funding," he observed.