AIIB casts ‘shadow’ on ADB meet

China-led Asian Infrastructure Investment Bank (AIIB) has already cast a shadow on the 50th annual meeting of Asian Development Bank (ADB) which started on Thursday in Yokohama, the port city of Japan.

At the opening press conference of the 50th annual meeting of the Board of Governors of ADB, its president Takehiko Nakao presented his initial statement which partly focused on the rise of AIIB and its relations with ADB. In the questions and answers session, he also faced a series of questions on AIIB.

Mr Nakao said comparing to AIIB, operation of ADB is quite large and it has 50 years of experience.  

While ADB has 67 members and of which 48 including Bangladesh are from Asia and the Pacific region, the members of AIIB in two and a half years reached 52 of which 35 are from the Asian region.

In this connection, the ADB president said they are not competing for the number of members.

The ADB president further said from the very beginning, focusing on the development of Asia is ADB's prime objective while AIIB is clearly focusing on infrastructure only.

"We have different objectives," he said, adding that ADB is investing in health and education and other social sectors.

Mr Nakao was of the view that two banks can actually cooperate with each other as developing Asia needs $ 1.7 trillion to meet the growing demand for infrastructure.

Though ADB's 70 per cent of the total financing is for infrastructure, by excluding China and India it come downs to only 3.0 per cent.

Supporting the ADB president's view on cooperation for infrastructure, Bangladesh Finance Minister AMA Muhith, who arrived in Yokohama on Thursday, said: "He (ADB president) said right thing. We need huge investment in infrastructure."

He also said AIIB has started to invest in Bangladesh.

Bangladesh joined the AIIB on March, 2016 by contributing $ 660 million as membership subscription. Thus, Bangladesh has now around 0.90 per cent vote in the newly formed regional bank.

AIIB approved a loan of $ 165 million for the Distribution System Upgrade and Expansion Project in Bangladesh in June 2016. It is one of the very first projects AIIB approves and is financing around 63 per cent of the project cost.

Another project titled 'Natural Gas Infrastructure and Efficiency Improvement Project' was also approved in March this year where AIIB is co-financing 13 per cent of the total cost while ADB is financing 37 per cent and the government of Bangladesh 50 per cent.

The ADB president said there is no rivalry between two financial institutions, but the media are trying to make ADB and AIIB rival.

AIIB is a regional investment bank formally launched in January 2016.

In another note, the ADB president praised the economic growth of Bangladesh.

He was of the view that while India is driving the growth in South Asia, persistent growth of Bangladesh is encouraging. "Bangladesh is achieving around 7 per cent growth rate which is encouraging."

He also made positive note on Bangladesh's efforts to improve the workplace safety. "Bangladesh is putting serious efforts to make the workplace safer for the workers," he said without categorically referring to Rana Plaza tragedy which claimed lives of more than 1,100 garment workers.

He said this while replying to a question at the opening press conference.

After the Rana Plaza disaster in 2013, global brands created huge pressure on Bangladesh to improve working conditions and safety in workplaces.

The opening press conference was arranged to describe different aspects and context of the annual meeting.

Though a series of official meetings, sideline events and media briefing on different activities have already started, the full-fledged formal inauguration, the opening of the core sessions of the Board of Governors will take place on Saturday morning.

Meantime, governors of the bank who are actually the finance or related ministers of the member countries are meeting with each other as well as senior officials of the ADB and Japan.

Finance minister of Bangladesh AMA Muhith is a governor or member of the board of governors while Kazi Shofiqul Azam, secretary of the Economic Relations Division, is an alternate governor for Bangladesh.

Mr Muhith arrived on Thursday and met the president of Japan International Cooperation Agency (JICA) and the governor of the Bank of Japan.

Meantime, a history book of ADB was also formally launched on Thursday afternoon in Yokohama.

The book titled "Banking on the Future of Asia and the Pacific: 50 Years of Asian Development Bank" is authored by Peter McCawley, an academic from the Australian National University (ANU).

The book aims to review how ADB over 50 years has responded to Asia's challenges. It is the first detailed corporate history of the regional development bank in last 30 years.

On the occasion of launching the book, a seminar also took place where ADB president Takehiko Nakao said it is a significant work.

ADB opened its first field office in Bangladesh in 1982. The book illustrates a picture of the singing event for opening its first resident mission outside Manila.

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