FINAL WORD: Jin Liqun
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FINAL WORD: Jin Liqun

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Financing infrastructure for sustainable development

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In an increasingly globalised, integrated and connected world economy, strategies must by default be formed through co-ordinated action. Building upon the success of the G20 Summit held in Hangzhou, China in September 2016, all of our stakeholders, including the multilateral financial and development institutions (MDBs) must reaffirm our strong commitment to a prosperous future for citizens of all nations, as outlined in the 2030 Agenda for Sustainable Development. 

To achieve that goal is a daunting task. Concerted efforts are crucial. MDBs have to explore new approaches and work as a team.  It is now universally acknowledged that investment in infrastructure is a stepping stone towards the realisation of SDGs. 

However, MDBs cannot get the job done by going it alone. They must engage all of the players, the private sector in particular, in mobilising resources for investment in infrastructure and other productive sectors. We have a shared responsibility to promote economic development for all. In joining hands to achieve the SDGs, we aim to contribute to an enabling environment for all actors to bring their potentials into full play. To this end, co-ordination in policy design based on a long-term vision is to be strengthened.  Effective implementation of policies will drive the greatest change. In order to make a meaningful difference, MDBs must be innovative, and have to pick up new skills and get out of their comfort zone. 

As a multilateral institution owned by 57 shareholders, with around 20 countries waiting to join, AIIB will uphold the highest of standards in its management and operations. AIIB is off to a good start. But there is a lingering concern over China’s dominance in this bank, as if it were a Chinese-run bank. No, it is not! This is the resounding answer. China is the AIIB’s largest shareholder, but the Bank is run by the management under the guidance of a non-resident board representing 57 shareholders. The Bank’s professionals, universally recruited, are of high calibre, with proven track records of competence and ethics. And our institution’s cardinal principle is lean, clean and green. The Bank is striving to build an image of a new-type MDB with the 21st governance. 

When European countries such as the United Kingdom, Germany, France and Italy decided to join the AIIB as founding members, they showed confidence in the design of the Bank, including its governance structure. When Canada, another G7 country, expressed its interest in the membership, it was a vote of confidence in the Bank’s management, as testified by its successful take-off and fast ascendance into orbit. 

ENVIRONMENTAL GUARDIAN

AIIB will strive to be the best guardian of the planet’s environment and ecosystem. It will take care of the people who may be otherwise adversely affected by investment projects. The bulldozers will pave the path for a better life for our people, not to destroy their homes and dreams. We will reconcile the pent-up demand for energy and other natural resources against the health of the living earth. That is a daunting challenge, but we will be able to scale the heights in overcoming all kind of difficulties in to the course of developing green infrastructure, helping countries address environmental challenges and meet their Paris Commitments.

AIIB is moving fast. Eight months into operation, our Board of Directors have already approved financing of $829m for six projects, putting us well on track to achieve our target of financing of $1.2bn worth of projects in 2016. 

Our efforts will surely play a constructive role in the achievement of the SDGs. Among the first projects we are financing is a national slum upgrade project in Indonesia, which will have a direct impact on poverty alleviation. Meanwhile, we are financing energy projects in Bangladesh, Pakistan and Myanmar, helping to bring cost-effective and green power to people in need. Furthermore, we have delivered the first private sector project in Myanmar, desperately in need to development assistance. 

With infrastructure investment, it is our obligation to work hand in hand with all responsible parties. We must work with governments to ensure a stable policy environment that can reduce risk. We must avoid excessive conditionality on governments, which can often be counterproductive to the desired goal. We must work with the private sector to give assurances that risks are manageable. And, of course, we must work together to leverage our own resources and knowledge.  

Infrastructure needs across the world are significant, and can only be addressed through joint efforts. Transformative projects, which will form the bedrock of the economies of many nations and establish a foundation for greater regional integration, will only be possible when undertaken through our collaborative efforts, given the large capital requirement and many times complex policy environments. 

AIIB sticks in no uncertain term to the mandate of promoting connectivity through infrastructure development. The tasks ahead are plenty, and daunting. AIIB will do its utmost to serve our borrowing members in a responsive, cost-effective, collaborative and efficient manner. We are looking forward to being a positive contribution in the fulfillment of its mission.

The international community has an unfinished agenda. Global recovery is painfully slow. Financial stability and job creation remain a formidable challenge to the countries in distress. EU’s economic playbook may not be good enough to address Brexit and all the problems that come with it. Frustration at globalisation is all too palpable, given unequal benefits to the participants. To a great extent, the problems stem from lack of integration, both global and regional, not over-integration. Hamlet may be a bit presumptuous, believing that he “was born to set it right” when “the time is out of joint.”  It is “we”, not “I” that can collectively head off chaos and put the global economy back on the right course.

Jim Liqun is President of the Asian Infrastructure Investment Bank

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