On May 2, the president of Asian Development Bank (hereinafter referred to as the ADB) Takehiko Nakao demonstrated that ADB prepared to cooperate with China-dominated Asian Infrastructure Investment Bank (hereinafter referred to as the AIIB) as long as it meets the criterion on the ADB’s Annual Press Conference in the Republic of Azerbaijan. The Asian development bank announced an adjustment in order to make their own ability to lend billions of dollars. The ADB is willing to cooperate with the AIIB, including joint financing. If the ADB implements co-financing, it needs to study how to put it into practice. But it states that they don't want to lower the standard of the ADB.
At the ADB’s four-days meeting, there are more than one country (including the ADB’s majority shareholders) are involved in become a founding member of the investment Banks with heated discussion of the positive outlook for the global development framework. China states that there are 57 countries having the intention to become the officially founding members of AIIB. However, American Japan and other countries have not yet to join. Takehiko Nakao held an one hour talk with the secretary-general Jinliqun of AIIB’s Temporary secretariat on May 1.The two sides agreed to co-operate in Asia, including common financing for infrastructure projects and sharing of information.
Takehiko Nakao and Jinliqun came to an agreement on the important impact of security policy on the project’s environmental and social influence. The ADB also announced a balanced sheet which included a merger of the Asian development fund and general fund source in order to increase their lending ability.
The ADB said in a statement that merger will bring the ADB’s loans and grants’ approved quota topping up to $20 billion as a whole 50% higher than the current level. According to the new ideas, the ADB’s assistance to poor countries will increase up to 70%, estimated aid scale may rise to $40 billion over the next several years, compared to $23 billion last year.
On the condition of the huge demand of Asian infrastructure financing, new multilateral development agencies(such as: AIIB, the Brics Development Banks）will work with existing multilateral development banks. The functions of AIIB are mainly to promote the construction of infrastructure in the Asian region, with others including improving the utilization efficiency of capital in Asia, supplementing the ADB’s investment and financing in the Asia-pacific region and international aid functions, reducing capital outflows in Asia region, promoting the further reform of IMF and World Bank. Compared to ADB, the functions of ADB are mainly to raise fund on economic development for the developing members of the member states or regions in the Asia-pacific region. Based on the above, we can draw the conclusion that they are complementary rather than competitive. They can cooperate with each other to boom the development of Asia-pacific region.
(News resource: China Daily /China News Broadcast Net /China Economy)
By Sijia Wu
Category: Monthly Events