Context:

• The Asian Infrastructure Investment Bank (AIIB) has recently approved US$ 500 million for ‘Covid-19 Emergency Response and Health Systems Preparedness Project’ initiated by India.

Highlights:

• It will be implemented by the National Health Mission (NHM), the National Centre for Disease Control (NCDC) and the Indian Council of Medical Research (ICMR).
• It will cover all States and Union Territories across India and address the needs of infected people, at-risk populations, medical and emergency personnel and service providers, medical and testing facilities, and national and animal health agencies.
• It will enable the government slow and limit as much as possible the spread of COVID-19 in India by providing immediate support to enhance disease detection capacities, oxygen delivery systems and medicines among others.

About AIIB:

• It is a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond.
• It is headquartered in Beijing. It commenced operations in January 2016.
• It aims to connect people, services and markets that over time will impact the lives of billions and build a better future.

About Board of Directors:

• It is composed of twelve members who shall not be members of the Board of Governors, and of whom nine are elected by the Governors representing regional members; and three are elected by the Governors representing Non-Regional Members.

 

 

• The Directors of the Board are persons of high competence in economic and financial matters.
• The Directors represent members whose Governors have elected them as well as members whose Governors assign their votes to them.
• The Board of Directors is a non-resident Board to reduce operating cost.
• It is responsible for the direction of the Bank’s general operations, exercising all powers delegated to it by the Board of Governors.
• It includes approving the Bank’s strategy, annual plan and budget; establishing policies; taking decisions concerning Bank operations; and supervising management and operation of the Bank and establishing an oversight mechanism.

About International Advisory Panel (IAP):

• It has established an IAP to support the President and Senior Management on the Bank’s strategies and policies as well as on general operational issues.
• The President selects and appoints members of the IAP to an initial two-year term, which can be renewed upon completion.
• The Panel meets at least twice a year, once in tandem with the Bank’s Annual Meeting, and second time at the Bank’s Headquarters in Beijing.
• The Panelists receive a small honorarium and do not receive a salary. The Bank pays the reasonable costs associated with Panel Meetings.

About the Membership in AIIB:

• It is open to all members of the World Bank or the Asian Development Bank and is divided into regional and non-regional members.
• The Regional members are those located within areas classified as Asia and Oceania by the United Nations.
• Unlike other MDBs (multilateral development bank), the AIIB allows for non-sovereign entities to apply for AIIB membership, assuming their home country is a member.
• Thus, sovereign wealth funds (such as the China Investment Corporation) or state-owned enterprises of member countries could potentially join the Bank.

Voting Rights of the Members:

• The China is the largest shareholder with 26.61 % voting shares in the bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %). The regional members hold 75% of the total voting power in the Bank.

• It has a governance structure similar to other MDBs (Multilateral Development Bank).
• With two difference, it does not have a resident board of executive directors that represents member countries’ interests on a day-to-day basis; and the AIIB gives more decision making authority to regional countries and the largest shareholder, China.

Way Ahead:

• It can create own space by contributing to sustained economic growth leading towards improved living standard of millions of poor people across Asia and other regions.
• It is still in its evolutionary phase that must be nurtured with Democratice principles avoiding single-country dominance (Chinese dominance) like that of USA in IMF and World Bank.