The $100-billion AIIB should focus on development of infrastructure like rail, road and ports with a view to promoting connectivity and growth in the Asian region, Prime Minister Narendra Modi said on Monday.
President-designate of the Asian Infrastructure Investment Bank (AIIB) Jin liqun called on Modi here. The Beijing-based multi-lateral lender is scheduled to commence operations later in the month.
During the meeting, Modi said “the newly-created financial institution need to focus on roads, rail and ports for enhancing regional connectivity, creating climate-resilient infrastructure and clean energy initiatives for sustainable development, a PMO statement said.” Focus on infrastructure, Modi said, “would also enhance the economic development and lift millions of people out of the life of impoverishment.”
Assuring India's full support to AIIB, the Prime Minister said that the multilateral institution, along with the BRICS New Development Bank, would play an instrumental role in development of infrastructure in the Asia region.
Jin, former Finance minister of China, was selected as the first president of the China-initiated multilateral lending agency which is seen as a potential rival to World Bank and Asian Development Bank. Besides Modi, Jin also met Economic Affairs Secretary Shaktikanta Das. “AIIB will become operational this month. Will be a good source of funding for infrastructure projects in India. Had very positive meeting with the president-designate of AIIB,” Das tweeted. The development bank was formally set up in Beijing on December 25. China has nominated its former finance minister Jin as the first president of AIIB.
AIIB now has 57 members and is seen as potential rival to the World Bank and the Asian Development Bank. With authorised capital of $100 billion and subscribed capital of $50 billion, AIIB will invest in sectors such as energy, transportation, urban construction and logistics as well as education and healthcare.
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. Their voting shares are calculated at 26.06 per cent, 7.5 per cent and 5.92 per cent, respectively.
Based on the shareholding, India, which is also a founding member, is expected to get the post of vice-president of AIIB.
In India, infrastructure financing has traditionally been done through the government and the existing multi-lateral development banks. These have been supplemented by public sector contributions through public-private partnership projects. However, in the context of fiscal consolidation and risk-averse private sector, AIIB will make additional resources available for infrastructure development.
The BRICS Brazil, Russia, India, China and South Africa nations have decided to set up a New Development Bank, based in Shanghai, and would focus on funding of infrastructure development of emerging economies.