ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB)

BACKGROUND

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What is AIIB?

“The Asian Infrastructure Investment Bank is a multilateral development bank (MDB) conceived for the 21st century. Through a participatory process, its founding members are developing its core philosophy, principles, policies, value system, and operating platform. The Bank’s foundation is built on the lessons of experience of existing MDBs and the private sector. Its modus operandi will be lean, clean and green: with a small efficient management team and highly skilled staff; clean, an ethical organization with zero tolerance for corruption; and green, an institution built on respect for the environment. The AIIB will put in place strong policies on governance, accountability, financial, procurement, and environmental and social frameworks.

AIIB Structure

According to Finance Minister Lou, the governance structure of the Bank will consist of 3 levels: Board of Governors, Board of Directors and the Management, adding that all powers of the AIIB will be vested in the Board of Governors which may delegate to the Board of Directors and the Management its powers as stipulated in the Articles of Agreement (AoA) [http://usa.chinadaily.com.cn/business/2014-10/24/content_18799068.htm, 24 October 2014.].

In the Forum’s recent lobby meetings with the ADB Board of Directors and as stated in AIIB’s description of the bank of keeping its operations ‘lean’, AIIB will have a board of directors that will not reside in Beijing as opposed to the practice in other MDBs. The likelihood of such a scenario poses the question of how will the board of directors carry out fully its duties particularly in reviewing and approving projects and other operations – related functions.

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