AIIB to Boost Prosperity & Security in Asia & Beyond
“Mobilizing Finance for Infrastructure: Innovation and Collaboration” was the theme of 3rd annual meeting of Asian Infrastructure Investment Bank, inaugurated by India’s Prime Minister Narendra Modi in Mumbai, Maharashtra and attended by over 3,000 delegates from 86 member countries. The Meeting had several concurrent sessions that discussed critical issues pertaining to environment and low carbon emissions, besides pitching on a high note to improve connectivity within the region and in turn enable citizens in the region to reach their potential and enjoy prosperity and security. The meeting concluded on Tuesday June 26, 2018 on an optimistic note to raise its lending capacity to boost prosperity and security in the region.
Asian Infrastructure Investment Bank (AIIB) is a Multilateral Development Bank, with a mission to improve economic and social development in Asia and beyond through focus on sustainable infrastructure, cross-border connectivity and private capital mobilization. AIIB with Headquarters in Beijing, founded to bring countries together to address Asia’s daunting infrastructure funding gap estimated at USD26 trillion through 2030, commenced operations in January 2016 and have now grown to 87 approved members from around the world. By investing in sustainable infrastructure and other productive sectors today, AIIB will better connect people, services and markets that over time will impact the lives of billions and build a better future. China is the largest shareholder with 26.06% voting shares in the AIIB. India is the second largest shareholder with 7.5% followed by Russia 5.93% and Germany with 4.5%.
Jin Liqun, AIIB Board of Governors President in his opening address of the 3rd annual meeting said that:
- Asia’s economy has become a global heavyweight after Asia’s economic growth far outpaced the global average for nearly three decades.
- Asian developing countries now account for 60% of global growth, while roughly two-thirds of global trade is part of value chains passing through Asia.
- Asia is assuming leadership in new areas.
- AIIB was formed with the ultimate objective to improve people’s lives, enable individuals to reach their potential and enjoy prosperity and security.
- It is the dream of all of us Asians to live a middle-class lifestyle with good education and healthcare, a clean environment and consumer comforts.
- Globalization can be disruptive and Asian populations support global economic integration because it has brought benefits to the region.
- A key task of governments is to ensure that the benefits of trade are widely spread to help the losers adjust and become winners.
Prime Minister Narendra Modi addressing the 3rd annual meeting of AIIB urged the multilateral lender with committed capital of 100 billion dollars and huge need for infrastructure in member countries, to expand from financing 4 billion dollars, to 40 billion dollars by 2020 and 100 billion dollars by 2025. Modi Said, “I believe that India and AIIB are both strongly committed to making economic growth more inclusive and sustainable.”
Modi cited a recent sovereign ratings upgrade as reflective of the country’s strong economic fundamentals and highlighted India’s economic progress and policies as he sought to woo investors by stating that:
- India has emerged as a bright spot in the global economy which is driving global growth as well.
- With a size of 2.8 trillion US Dollars, it is the seventh largest in the world.
- It is the third largest in terms of purchasing power parity.
- In the 4th quarter of 2017, we grew at 7.7% and in 2018 projected to grow at 7.4%.
- External sector remains robust.
- Our foreign exchange reserves of more than 400 billion US dollars provide us enough cushions.
- Global confidence in India’s economy is rising.
- India counts as an extremely low risk political economy.
- Total FDI flows have increased steadily – more than 222 billion US dollars have been received in the last four years.
- As per UNCTAD’s World Investment Report, India continues to be one of the top FDI destinations in the world.
- Investors want political stability and a supportive regulatory framework to ensure protection of their investment.
- India is one of the most investor-friendly economies in the world.
- Investors look for growth and macroeconomic stability.
- Indian government is firmly committed to the path of fiscal consolidation.
- India’s debt as percentage of GDP is consistently declining.
- We have liberalised the FDI regime.
- Today, most sectors are on automatic approval route.
- Size and growth of Indian market holds much potential and that country’s per capita income has doubled in the last decade.
- Agriculture is the lifeline of the Indian economy. We are promoting investments in warehouses and cold.
- A ‘New India’ is rising. It is an India that stands on the pillars of economic opportunity for all, knowledge economy, holistic development, and futuristic, resilient and digital infrastructure.
Amitabh Kant, Chief Executive Officer, NITI Aayog in India, while participating in a panel discussion during the day in the 3rd annual meeting AIIB stressed that India believes in globalization and has opened its economy in every single sector that you can name. Make in India is about laying emphasis on manufacturing, not protectionism. As a result, India has stood numero uno in terms of attracting foreign direct investment in the past three years.