AIIB held a three-day closed-door meeting in Singapore on May 20, co-chaired by China's Vice Minister of Finance, Shi Yaobin, and Singapore's Deputy Secretary of the Ministry of Finance, Yee Ping Yi. (Photo : www.news.xinhuanet.com)
The Asian Infrastructure Investment Bank (AIIB) has achieved a milestone after three-day finalizing discussion on the Articles of Agreement (AOA) and the scheduled signing of the AOA at the end of June in Beijing as the 5th Chief Negotiators’ Meeting ended on May 22, the Xinhua News Agency reported.
Shi Yaobin, vice minister of the Ministry of Finance and permanent chair of the Chief Negotiators' Meeting, told Xinhua that the planned authorized capital of AIIB will be based on the GDP for Asian countries.
"The planned authorized capital of AIIB is 100 billion dollars, which will be allocated upon data of GDP for Asian countries. As for countries outside the region, GDP is also an important criterion for allocation," Shi said in an interview with Xinhua.
The report said that it is similar to the practice of the International Monetary Fund (IMF), in which allocation is based on GDP and capital.
According to research by the Korea Institute for International Economic Policy, China (30.85 percent) will be AIIB's largest shareholder, followed by India (10.4 percent), Indonesia (3.99 percent), Germany (3.96 percent) and South Korea (3.93 percent).
Chen Kang, professor at Lee Kuan Yew School of Public Policy, National University of Singapore, who also worked at the World Bank's Socialist Economies Reform Unit, supported the allocation criteria of AIIB.
"AIIB would have lost its Asian characteristic if allocation was strictly followed the only standard of GDP. Firstly differentiate Asian countries and countries outside the region, then allocates on the basis of GDP. This practice sounds more reasonable, as countries out the region are developed countries in Europe," said Chen Kang.
Henry Gao, associate professor of law with Singapore Management University, noted that the passing of AOA means major powers have made an agreement, an indication that AIIB has entered a crucial phase.
The report said that the AOA would determine the efficiency of AIIB in the future, and the most important part in the AOA is the establishment of decision-making system, equity allocation and loan approval system.
The report added that AIIB would try to have a simple approval process for loans; borrow good experiences from existing multi-lateral financial institutions such as World Bank and Asian Development Bank (ADB) to build a "lean, clean and green" AIIB; as well as seek improvements and innovation in managing the new bank.
The meeting also discussed the issue of currency that will be used by AIIB.
