THE Asian Development Bank (ADB) advised China’s newly established Asian Infrastructure Investment Bank (AIIB) to follow international standards when funding projects.
On Friday, following the official establishment of the AIIB, ADB President Takehiko Nakao issued a statement, saying the creation of AIIB was “understandable” given Asia’s mounting infrastructure-financing needs.
Nakao, however, said it is important for AIIB to adopt international best practices in procurement, as well as environmental and social safeguard standards for the projects it funds.
“It is vitally important that AIIB adopt international best practices in procurement and environmental and social safeguard standards on its projects and programs,” Nakao said.
However, the 48-year-old Manila-based multilateral development bank said it is willing to collaborate with AIIB in areas that are common priorities for both banks.
“Once AIIB is formally established, the ADB is prepared to consider appropriate collaboration in areas of common priorities,” Nakao said.
Nakao said the creation of the AIIB will contribute to providing additional resources for infrastructure investments in Asia.
In May ADB East Asia Department Director General Ayumi Konishi said the infrastructure needs of Asia are seen to double to around $800 billion a year in the 2011-to-2020 period, from around $400 billion a year in the preceding decade.
But, Konishi said, multilateral institutions like the ADB, the World Bank, International Finance Corp. and other existing organizations could only provide, at the most, $50 billion a year. This leaves around $750 billion worth of infrastructure projects unfunded in this decade.
Reports stated that the AIIB will become fully operational by 2015 under the leadership of Jin Liqun, a former vice president for operations of the ADB.
The AIIB was proposed by Chinese President Xi Jinping in a visit in Southeast Asia in October 2013.
The creation of the AIIB was also in line with China’s proposed Maritime Silk Road of the 21st Century that will include China and 10 Southeast Asian nations in the Pan-Beibu Gulf.
The ADB, on the other hand, was established in 1966. With its capital of $175 billion and large skills base, the ADB has contributed to infrastructure building and social development to reduce poverty in the Asia-Pacific region, working closely with regional and nonregional members.
The bank itself is making efforts to make its operations even more efficient and client-oriented, and to increase its lending capacity to further support the region’s needs.