China-backed AIIB secures World Bank deal
China-backed AIIB secures World Bank deal Financial Times
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The Asian Infrastructure Investment Bank Approves Partnership with the World Bank
The Asian Infrastructure Investment Bank (AIIB), Beijing’s response to the World Bank, has recently approved one of its most significant international partnerships to date. This comes just weeks after accusations were made that the AIIB had been infiltrated by China’s Communist party.
Partnership with the World Bank
The AIIB’s board has given its approval for a proposal to issue $1 billion in credit guarantees against sovereign-backed loans made by the International Bank for Reconstruction and Development (IBRD), the lending arm of the World Bank. This partnership is part of an effort by multilateral development banks to expand their role in mobilizing finance and achieving the Sustainable Development Goals (SDGs).
Mutually Beneficial Partnership
The AIIB views this partnership as mutually beneficial. The World Bank has financing constraints, while the AIIB has capital it is eager to deploy. By diversifying its portfolio and increasing lending to low-income borrowers, the AIIB can contribute to the SDGs and support sustainable development.
Background and Review
The proposal for this partnership was first discussed in June, shortly after the AIIB’s former head of communications, Bob Pickard, abruptly left the bank. Pickard had alleged that the Communist party was exerting undue influence on the AIIB’s decision-making processes. However, an internal review conducted by the AIIB concluded that it follows the highest standards of multilateral governance and that there was no evidence of undue influence.
Benefits for the World Bank
A deal with the AIIB would enable the World Bank to provide relief against capital constraints, allowing it to extend fresh loans. This partnership aligns with the World Bank’s goal of mobilizing finance for sustainable development.
About the AIIB
The AIIB was launched in 2015 as a Chinese-led alternative to western-led multilateral organizations. It currently has 106 members, including India, the UK, France, Australia, Canada, and South Korea. Notably, the US and Japan have not joined. China holds a 26.6% voting stake in the AIIB, giving it veto power over important decisions.
Cooperation with the World Bank
Since its establishment, the AIIB has signed cooperation agreements with the World Bank and has co-financed several projects together. The AIIB’s AAA credit rating allows it to borrow at low rates and lend to low-income countries at favorable terms.
Conclusion
The approval of this partnership between the AIIB and the World Bank marks a significant step towards achieving the SDGs. It demonstrates the commitment of both institutions to mobilize finance for sustainable development and support low-income borrowers.
SDGs, Targets, and Indicators
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 17: Partnerships for the Goals
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
- SDG 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
The article does not explicitly mention any indicators to measure progress towards the identified targets. However, the approval of the partnership between the AIIB and the World Bank’s lending arm can be seen as a step towards achieving SDG 9.1 by developing sustainable infrastructure. Additionally, the collaboration between these two institutions can be seen as a form of multi-stakeholder partnership, contributing to SDG 17.16.
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 9: Industry, Innovation, and Infrastructure | 9.1 Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being. | No specific indicators mentioned in the article. |
| SDG 17: Partnerships for the Goals | 17.16 Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources. | No specific indicators mentioned in the article. |
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Source: ft.com
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