Pakistan is among more than 50 nations that signed the articles of agreement for the China-led Asian Infrastructure Investment Bank, an institution largely seen as a rival to IMF, World Bank and the Asian Development Bank that will fund energy, transport and infrastructure projects across Asia.
Major world business leaders like Australia, the UK, Germany and South Korea are among the signatories of the bank in which China is expected to have a leading share of about 30-40 percent. Those not part of the new institution include the United States and Japan.
Pakistan’s Finance Minister Ishaq Dar signed the articles of agreement for the AIIB in Beijing on June 29, which is likely to start operations by the end of 2015. Pakistan remained an active member throughout the deliberation for the new bank and expects to draw financing support for its communications and energy infrastructure projects.
“We believe that the Bank will be an important platform to covert the abundant savings available in the region into investment to help regional economies achieve sustainable and rapid development,” Dar commented at the signing ceremony,
China and Pakistan this year signed various agreements to launch $45 billion Pakistan-China Economic Corridor that would transform the South Asia’s economy as a regional hub and facilitate Chinese access to markets in South, Central and Western Asia, and to the Middle East and Africa.
The AIIB, first proposed by China in 2013, is likely to be a major investment partner in the corridor that involves a cluster of communications, infrastructure and power generation projects.
AIIB will have authorized capital of $100 billion and Asian and Oceanian countries will contribute up to 70 percent of the total capital, according to Chinese official news agency Xinhua. China, India and Russia are the top three shareholders.
Australian, that once shared concern with the United States and Japan about the way AIIB would be governed, is the sixth largest partner, committing around $930 million over five years to finance infrastructure projects in Asia, according to state-run ABC online news.
Many see AIIB a move by China to increase its global clout, especially in Asia where the Asian Development Bank is playing a similar role. Japan and the United States hold the highest percentage of voting power in ADB. The U.S. also has the largest voting share of 16.74 in the IMF as against 3.81 percent by China.