World Bank President, Jim Yong Kim, discusses changes within the World Bank. This interview clip did not mention the AIIB.
*SEE VIDEO #4 "Jim Kim reflects on World Bank reforms"
Japan Finalizing Infrastructure Account to Respond to AIIB Presence.
In response to the rapid rise of the Chinese-led Asian Infrastructure Investment Bank (AIIB), Japan is following up with it countermeasures in order to keep up with the competition. This comes in the form of a new account in the Japan Bank for International Cooperation (JBIC) dedicated specifically for growing infrastructure projects in Asia. The Japanese government is still in the process of ironing out the details concerning initial funding to get the account quickly operational as well as carefully drafting specific lending policies in order to ensure the stability of the bank's funds and durability to operate without high-risk, high-return plans.
Germany Becomes 4th Largest Contributor to AIIB
Germany solidifies its position as the 4th largest contributor to the AIIB as a member state. It is now the largest non-regional donor and currently holds 4.15% of the voting shares in accordance with its contribution amount of 4.5 billion dollars.
AIIB Outlines 5 Core Target Areas for Projects
Chief officer of the Multilateral Interim Secretariat of AIIB, Chen Huan, recently stated the AIIB's outlined core areas of focus. During it's beginning phases of implementing projects, the bank with focus primarily in the areas of energy, transportation, rural development, urban development, and logistics. As mentioned by AIIB chef director, Jin Liqun, the bank will then expand into the realm of "social infrastructure" investment, focusing on education and healthcare.
AIIB Reaches Final Approval Stages
China's National People’s Congress (NPC) Standing Committee voted to approve the Asian Infrastructure Investment Bank agreement which forms the legal framework for the bank. This step moves the AIIB closer to its formal establishment by the end of 2015. China, India and Russia are the three largest shareholders, with a voting share of 26.06 per cent, 7.5 per cent and 5.92 per cent, respectively. Fifty-four of 57 prospective founding members have signed the agreement as of last October 2015 and the other three are expected to sign before the end of this year. All prospective members are expected to have their legislatures vote in favor of the agreement before the end of 2016 to formally become founding members.
AIIB-Operations, Governance, and Loans
How is China moving forward concerning AIIB operations and governance? China's reasons for creating the AIIB stemmed from the slow procedures of the IMF and World Bank. It criticized these two financial institutions as catering primarily to "Western Standards" and not international ones as noted by AIIB president Jin Liqun. There is also a comparison and contrast between the financial and lending structures of the AIIB and the IMF. Some focus is also placed on the growing opposition from Japan out of its concerns for the rising influence the Chinese-led bank around Asia.
Japan Further Ramping up its own Infrastructure Commitments
Japan's Prime Minister Shinzo Abe told business leaders at an Association of Southeast Asian Nations in Kuala Lumpur that Japan together with the Asian Development Bank plans to bolster its role as provider of infrastructure and finance in Asia. The plan envisions higher funding for development loans up to $110 billion over the next five years. Mr. Abe pointed out the need to streamline the lending process and cut by half the time it takes to approve and release funds. Japan is pushing to be the lender of choice even as China's AIIB is preparing to soon start offering similar loans. Achieving this goal will be supported by the country's reputation for reliability and quality.
Positive Views and Some Concerns from Around the Globe Concerning the AIIB.
A brief overview of the "One Belt, One Road" initiative and how the AIIB was designed to be instrumental in making President Xi's plans various infrastructure and economic goals a success.
Pros and Cons are offered in the form of various positive opinions or points of skepticism that different countries have toward the new bank. Japan in particular is once again mentioned as being quite concerned with the rising prowess of China's economic ventures in the region.
The Philippines and Vietnam were also mentioned due to their concerns of the bank's governance in addition to the ongoing disputes in the South China Sea.
Central Asia, on the other hand, has quite a bit to gain from President Xi's goals. Tajikistan, Kyrgyzstan, and Kazakstan were named as countries which will benefit from the infrastructure investments in their countries.
Ebbinghausen ends by revisiting the U.S's concerns about the AIIB, particularly in terms of it wanting to maintain existing global norms, which it established.
China's Silk Road Initiative: Mainly Economical or Political?
The Silk Road initiative is being met with resistance from Japan, S Korea and the US but is being welcomed by Central Asia. This initiative, according to Japan, should include Japan and S Korea if it is purely economic and not political.
Malaysia will Reap the Benefits of Fitting into China's "Silk Road"
Malaysia lies within the "Silk Road" and China will invest more there as a result. China will focus on transportation infrastructure and will invest a significant amount more than it has in the past. China hopes that using the yuan in transactions with Malaysia will increase the yuan's prestige, and undermine the US dollar's prominence.
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