MANILA (Reuters) – China is proposing to include non-Asian countries on the board of the Asian Infrastructure Investment Bank (AIIB) in a move interpreted by some nations as giving small shareholders a voice in the institution, the Philippines’ finance chief said on Wednesday.
The planned governance mechanism of the China-backed AIIB includes a provision that prevents any country from having more than one seat on the 12-member board of directors, Cesar Purisima told reporters.
The comments came as founding members of the bank began a three-day meeting in Singapore to discuss operational policies and other issues for the establishment of the institution.
“There is a provision splitting the 12 (board members) into nine regional and three non-regional”, Purisima said. “That helps out the smaller countries.”
“I am seeing features that make it more inclusive.”
China says it will not hold veto power inside the AIIB, unlike the World Bank where the United States has a limited veto.
Founder members will initially pay up to one-fifth of the AIIB’S $50 billion authorized capital, which will eventually be raised to $100 billion.
Peter Garber, a senior adviser in Deutsche Bank’s global markets research, told reporters in Singapore the creation of a multilateral bank may help overcome governance problems that China has faced in the past on some bilateral loans.
But competition from multilateral institutions and other bilateral lenders such as Japan could be a challenge for the new institution.
AIIB “is starting up in a world where there are lots of suppliers of capital, as we see with the sudden entry of Japan, so it may not be so easy to find projects”, Garber said.
Apart from the World Bank and the Asian Development Bank, plans are also underway for a development bank by countries that form the BRICS – Brazil, Russia, India, China and South Africa.
Japan’s Jiji Press said on Tuesday Japan would announce a $100 billion plan to invest in roads, bridges, railways and other projects in Asia.
(Reporting by Rosemarie Francisco, additional reporting by Saeed Azhar in SINGAPORE; Editing by Robert Birsel)