The Asian Infrastructure Investment Bank – New Multilateralism: Early Development, Innovation, and Future Agendas
| Date | 01 November 2019 |
| Published date | 01 November 2019 |
| Author | Gregory T. Chin |
| DOI | http://doi.org/10.1111/1758-5899.12767 |
The Asian Infrastructure Investment Bank –
New Multilateralism: Early Development,
Innovation, and Future Agendas
This special section on the AIIB as new multilateralism is dedicated to Robert W. Cox, who
inspired generations of scholars to study international organization and emerging global
governance, and the sources of global change
Gregory T. Chin
York University
Multilateral development banks (MDBs) normally do not
excite international commentators. But when the China-
backed Asian Infrastructure Investment Bank (AIIB) was
announced in 2014, multilateral banking moved from the
back pages to the front. Developing countries in Asia were
enthusiastic about the idea of a new regional bank
focused solely on infrastructure. The Chair of the UN
Development Group (and UNDP Administrator), Helen
Clark, suggested the AIIB could become a powerful con-
tributor to the global Sustainable Development Goals
(Clark, 2016). Some observers welcomed the AIIB as an
alternative to the World Bank, or a return to public invest-
ment, others saw developing countries responding to the
slow pace of Bretton Woods institutional reform (Chin,
2016; Griffith-Jones, 2015; Lim and Mako, 2015; Rodrik,
2016; Stiglitz, 2015). But the predominant voices, the
incumbents, were skeptical and suspicious, as discussed in
Callaghan and Hubbard (2016).
Much of the early debate on the AIIB focused on China,
and geopolitics, that is, whether a thirst for international
power or strategic advantage had led the Chinese to create
the AIIB; why other states followed the Chinese to join the
new bank; whether the new lender undermines US leader-
ship, the Bretton Woods order, or liberal international norms
(Chan, 2017; Gabusi, 2017; Goh, 2014; Hanlon, 2017; Wang,
2017; Wilson, 2019). Along these lines, former US Treasury
Secretary Lawrence Summers (2015) ruminated that the
AIIB’s creation may well be ‘the moment the US lost its role
as the underwriter of the global economic system’; and that
no other event since Bretton Woods was comparable in
magnitude, in terms of ‘the combination of China’s efforts
to establish a major new institution and the failure of the
US to persuade dozens of its traditional allies, starting with
Britain, to stay out of it’.
Less attention has been given to examining the interests,
ideas, and priorities of the broader membership of the Bank,
namely beyond China, or the main trends and patterns in
the institutional development and performance of the AIIB,
the evolving priorities and agendas of members and various
constituencies of bank members in the period since the
launch in January 2016, and for the next 5 to 10 years. Such
analysis would be geared to examining the actual empirical
details of the AIIB’s development and growth, especially its
multilateral character, or the limits to date, and reconsider-
ing interpretive frameworks.
The research gap is especially noteworthy when one con-
siders that the AIIB has grown faster and more steadily than
the skeptics expected. Although it may be too early to
declare the AIIB as ‘arguably the most modern and interna-
tional financial institution in the world’, and a ‘beacon of
multilateralism’amid of world of growing protectionism, the
empirical data are telling.
1
The AIIB opened with 57 found-
ing members, more than its most direct counterpart, the
Asian Development Bank (ADB), which opened with 31
members, in 1966. By July 2019, only three-and-a-half years
after the Bank opened, the AIIB has reached the milestone
of 100 members, whereas the ADB has 68 members, after
53 years. The AIIB’s current 30 full, non-regional members,
44 full regional members, and 26 prospective members (20
non-regional, and 6 regional, which have yet to ratify the
Articles of Agreement) –eventually 50 regional members,
and 50 non-regional members –arguably puts the new
Bank into the global realm of the World Bank, in the scope
of its membership. Moreover, the AIIB’s membership collec-
tively accounts for 78 per cent of the world’s population
and 63 per cent of global GDP –and 75 per cent of global
carbon emissions (Alexander, 2019). In 3 years, the AIIB’s
lending went from zero to more than $8 billion, and 45 pro-
jects (as of July 2019). However, to give some comparative
perspective, the AIIB still has serious distance to cover in
order to catch up to the more established ADB, whose lend-
ing and grants totalled about US$12–13 billion per year in
2015 and 2016. The AIIB plans to reach a similar target of
US$10 billion plus, per year, in the next 5 years. For the
other-half of its financial operations, fund-raising, in 2017,
the AIIB received Triple A credit ratings from the three major
rating agencies (and confirmed each year henceforth), and it
issued its first global bond, in London, in May 2019, success-
fully raising US$2.5 billion, at a price identical to the World
Bank.
Global Policy (2019) 10:4 doi: 10.1111/1758-5899.12767 ©2019 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 10 . Issue 4 . November 2019 569
Special Section Article
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