According to newspaper reports, the Asian Infrastructure Investment Bank has been formally launched in Beijing with $100billion capital for the development of infrastructure within the member countries. The establishment of the bank is a major leap toward fairer global economic governance as the Chinese president put it on the occasion of its formal inauguration. The bank is seen as the rival of the World Bank but with more representation of the developing nations and less hard conditions for the borrowers. Pakistan is one of the founding members of the newly established bank, which has 57 member states, including Australia and South Korea, but excluding Japan and the United States. The Chinese president hopes that funding of the bank will not only boost investment to support infrastructural development but will serve to enhance private investment for the development projects.
Pakistan is one of countries which have ratified the articles of agreement and is eligible to select a board of directors. Out of $100 billion paid up capital, China has initially pledged around $30 billion as the authorized capital and has injected another $50 million at the launch of the bank keeping in view the enormous needs for basic infrastructure in the Asian countries. The bank is expected to lend up to $15billion a year for the first five or six years and will start its operations in the second quarter of this year. With regard to Pakistan, the government seems to be eyeing on loans from this lending agency too after it has exhausted all its options with the World Bank, the International Monetary Fund and Asian Development Bank during two and half years of its tenure.The Asian countries face severe connectivity gaps and unnecessary bottlenecks. And development of infrastructure is a basic requirement for robust economic growth and economic activities. Transparency of the project is a key to get financial assistance and this condition is necessary to discourage corruption and mismanagement.
According to Finance Minister Ishaq Dar, who was in Bejiing on the occasion of the opening ceremony, if the development projects in Pakistan are included in the first batch of loans, top priority will be given to the hydroelectric dams and reservoirs.The government in the office always has a free hand to do anything in this country, but on the matter of loans, a debate must have to be started in the National Assembly to put limits on borrowings from the lending agencies. The government takes loans in the name of development, but funds are syphoned off at every stage of the disbursement. There is no harm in taking loans from the newly established bank, but the money should be judiciously utilized.
