ADB, China’s new AIIB vow to cooperate on development
AS PRESIDENT of the newly formed Asian Infrastructure Investment Bank, Jin Liqun might be looked upon as an alien at the annual meeting of the Asia Development Bank in Frankfurt, given the ostensible institutional rivalry between the two regional developm
Yesterday, Jin was taking part in the ADB meeting as a special guest and also speaker. He appeared on a panel with distinguished speakers from Germany and Luxembourg to discuss “New Asian-European Approaches on Finance and Infrastructure”.
Instead of competing with the ADB for lending to development projects, the AIIB is in fact seeking cooperation from the ADB to fill up the huge financing gap, as some US$1 trillion (Bt35 trillion) in fresh loans are needed over the coming decade.
On Monday, Takehiko Nakao, president of the ADB, and Jin signed a memorandum of understanding on the sidelines of the ADB’s 49th annual meeting of its board of governors.
The MoU sets the stage for jointly financing projects, as the AIIB is expected to commence lending soon to prove that it is not solely set up to finance China’s “One Belt, One Road” project.
Initially, the AIIB was seen as a rival to both the World Bank and the ADB in financing development projects, but as the financing need for infrastructure projects in the developing countries is huge, there is room for all players.
The ADB and AIIB are already discussing projects for co-financing in the road and water sectors.
Jin seems to be seeking to learn more from the ADB’s long-standing experience in infrastructure and development lending programmes. This December, the ADB will commemorate its 50th anniversary.
M4 highway project
The highlight of their MoU is Pakistan’s M4 highway project, a 64-kilometre stretch of motorway connecting Shorkot to Khanewal in Punjab province.
The ADB and AIIB agreed to strengthen cooperation, including co-financing, at the strategic and technical levels on the basis of complementarity, value-added, institutional strengths and comparative advantages, and mutual benefit, the MoU states.
“I am very pleased to have this framework of collaboration with a new and strong partner in Asia,” Nakao said.
“ADB has been working closely with AIIB throughout its establishment process. We will further strengthen our cooperation in promoting sustainable growth, reducing poverty and combating climate change in the region,” he said.
Jin said: “I am delighted to take a further step forward in our partnership with ADB.
“AIIB looks forward to deepening our already strong relationship and expanding our collaboration as we seek to address the significant infrastructure financing needs in the Asia region.”
Through co-financing, knowledge work and joint policy dialogue with member countries, the two institutions say they will work together in areas including energy, Jin transport, telecommunications, rural and agriculture development, water, urban development and environmental protection.
The ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration.
Last year, ADB assistance totalled $27.2 billion, including co-financing of $10.7 billion.
The AIIB, located in Beijing, |is a multilateral development| bank that focuses on the development of infrastructure and other productive sectors in Asia, including energy and power, transport and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics.
