UNB, Dhaka :
Bangladesh is poised to become the founding member of the Asian Infrastructure Investment Bank (AIIB) as it is going to sign a Memorandum of Understanding (MoU) on October 24 in Beijing with other Asian nations to launch the much-hyped regional development bank.
“As a signatory, Bangladesh will become the founding member of the China-led investment bank,” said a senior Finance Ministry official.
A two-member Bangladesh delegation, led by State Minister for Finance MA Mannan, leaves here on October 22 for Beijing to sign the MoU. “We’ve agreed in principle to sign the MoU for establishing the Bank along with other nations,” Additional Secretary of Economic Relations Division (ERD) Mohammad Asif-uz-Zaman told UNB.
He said so far 21 Asian countries, including Malaysia, Thailand, India, Sri Lanka and Nepal, have agreed to sign the MoU while the number of countries is expected to rise.
The senior ERD official said on completion of MoU signing formalities for the new regional bank, negotiations among the signatory members of the proposed bank would start to finalise the Articles of Agreement (AOA) of AIIB.
Asif-uz-Zaman, who attended a number of preparatory meetings in Beijing on launching the new bank, said the ongoing support from the multilateral lending agency like the World Bank and the ADB is not enough to address the huge infrastructural needs of Bangladesh. “The demand for infrastructural requirements is rising day by day and the country needs huge investment where AIIB could play a supporting role,” he added.
AIIB, with the leading role of China, will be a regional multilateral development bank to cater to the growing needs of the Asian infrastructure development.
The authorised capital stock of the Bank is set at US$ 100 billion while the initial subscribed capital aims to be around $ 50 billion with flexibility subject to the financial capacity of founding members, according to a draft MoU on launching the new bank.
The paid-in capital shall account for 20 percent of the initial subscribed capital, in installments, in the form of convertible currencies and/or non-convertible currencies the Bank agrees.
Another official at the ERD told the news agency since infrastructures in Bangladesh remain weak and the country needs at least $ 5 billion a year for the next 10 to 15 years to build necessary infrastructures and sustainable development project, this new Bank will fulfill the financing gaps.
Besides, this will break the monopoly of World Bank and the IMF, and will benefit countries like Bangladesh for socio-economic development.
After the MoU signing, Asif-uz-Zaman, the multilateral working group of AIIB will be established to start international recruitment by end of 2014 while consultations will be held with the new regional and non-regional countries that have the interest to join AIIB as founding members based on their endorsement of the MoU in 2015.
The prospective founding members will negotiate and sign the articles of agreement by 2015 while the AIIB is expected to begin its operations by the end of 2015.
The draft MoU said with approval by the Board of Governors, the Bank may set up a trust fund to mobilise more financial resources from public and private sectors to better meet the needs of infrastructure development in the region.
The governance structure of the proposed regional bank will be of three tiers – Board of Governors, Board of Directors and Bank Management.
All powers of the Bank shall be vested in the Board of Governors who may delegate to the Board of Directors and Management its powers as stipulated in the Articles of Agreement to be drafted.
The Board of Directors will be non-resident and meet four times annually, while the bank shall draw upon the best practices of the existing multilateral development banks in setting up its governance structure to ensure proper check-and-balance and efficiency and effectiveness in its administration and operation.
Bangladesh is now member of development banks like ADB and the World Bank.
The draft MoU of AIIB stipulates that the countries which will sign the MoU will become its founding members, whose voting rights, in full or fraction, shall become effective upon the first payment of the paid-in capital.
The Bank will be headquartered in (a city of a regional founding member) as agreed by consensus while the Bank may set up as and when necessary, local offices in the territory of the members concerned.
