Bangladesh is set to sign the Articles of Agreement (AoA) of the Asian Infrastructure Investment Bank (AIIB) on June 29 in Beijing in which the country is expected to get less than one percent or 0.6729 percent shares of the China-led giant Bank.
Leading a three-member delegation, State Minister for Finance and Planning MA Mannan leaves here for Beijing on Saturday to sign the ground-breaking agreement going to take place after eight months of the signing the MoU on the proposed multilateral bank. Due to local engagement and the ongoing budget session, Muhith skips the signing.As a founding AIIB member, Bangladesh will have to pay $ 660.50 million as capital subscription as per the Allocation of Capital, said an official at the Economic Relations Division (ERD). The signing will provide Bangladesh the access to huge investment needed for its infrastructure development.
The ERD official told UNB that the authorised capital of the proposed AIIB is $ 100 billion where Bangladesh would get its 0.6729 percent shares based on the GDP (60 percent) and PPP-GDP (40 percent).
Based on 20 percent of the paid-in share, Bangladesh would have to pay $ 132.10 million to the Bank in five equal installments over the next five years with $ 26.42 million in each installment. As per that shares, Bangladesh would get a total of 9635 voting rights which is also 0.8348 percent of the total votes.
Among South Asian nations, India holds the largest share of 8.52 percent. Being the sponsoring country China’s share is 30.34 percent, with South Korea and Indonesia having 3.80 and 3.42 percent stakes respectively.
State Minister MA Mannan said the AIIB’s entire focus will be on physical infrastructure. “I think we’ll need huge capital in physical infrastructures and we’ll have to go a long way since we’re going to build the 2nd Padma Bridge and even more.
About the possible interest rates of the Bank, Mannan said it is yet to be finalised.
Unlike other agencies and organisations, he said none would have the veto power in the AIIB as its all members would have the same dignity.
Replying to another question, the State Minister said Bangladesh is yet to seek any fund from the AIIB, but it would surely seek. “The fund from AIIB will be available within this year, but it’s a different question, whether we’ll take it right now or not,” he said.
Asked whether the country’s relationship with AIIB will hurt Banglaesh’s relationship with other lending agencies like the World Bank, IMF, ADB, the State Minister replied in the negative saying that Bangladesh’s ties with other multilateral organisations is old and the World Bank, IMF have also welcomed the AIIB formation.
Mannan said the new bank will provide loans for big infrastructure projects such as roads, railways, ports and power.
The AIIB having 57 founding member countries, including the UK, Australia and initiated by China, will help meet Asia’s enormous infrastructure needs that are not being met by the current international institutional finance arrangements. The plan for forming the bank was announced by Chinese President Xi Jinping and Premier Li Keqiang in October 2013.
AIIB was initiated by the new Chinese leadership, with the aim of creating a more equal and balanced development model in Asia.
The first proposed projects of the bank are the New Silk Road and the Maritime Silk Road (MSR). Both the projects are oriented towards developing infrastructure and connectivity in the region. These projects will benefit not just China but all the countries along these ‘roads’, as well as the entire region.
Former deputy finance minister of China Jin Liqun has been working as the bank’s secretary general since October last year.- UNB
