The founding members of the US$100bn Asian Infrastructure Investment Bank (AIIB) have formally signed the Articles of Agreement that allow for its establishment at a ceremony in Beijing.

While ratification will have to be completed by each founding nation, it is expected that it will have begun operations by the end of the year, with China providing the largest portion of funding and, therefore, taking the largest share of voting rights.

China will provide some 30.34% of the capital for the bank, with India the next largest on 8.52%, followed by Russia (6.66%), Germany (4.57%), South Korea (3.81%) and Australia (3.76%).

As the biggest shareholder, China will have 26.06% of the voting rights, meaning it has veto over any decisions on the AIIB’s investment, which require 75% approval to be carried out.

Many have perceived the bank’s establishment as a direct result of the failure of the US and its allies to offer it significant input into the direction of the established development finance institutions, namely the World Bank, IMF and the Asian Development Bank (ADB).

“The World Bank has evolved into a place of fear and retaliation,” leaked World Bank report

Indeed, just hours after the AIIB was established, a 163-page report was leaked to the International Consortium of Investigative Journalists which found that the Washington DC-based institution is facing internal turmoil.

The report said: “The World Bank has evolved into a place of fear and retaliation. Intellectual debate is no longer welcome. Management is inept and there is no captain in this ship. Senior management does not know its own organisation … only fear, fear, fear.”

The US and Japan were both invited to join the AIIB but declined to do so, which has drawn criticism from figures closely following US trade policy.

One senior official in the US Chamber of Commerce described it to GTR as “an exercise in how not to advance the national interest in diplomatic terms,” adding that the US strategy of standing-off “didn’t work, so we ended up looking silly”.

Others have voiced hopes that the AIIB will work with existing organisations to plug the infrastructure gap in Asia, which is estimated by the ADB to stand at around US$2.5tn. In an interview with GTR recently, the IMF’s research chief for Asia Pacific Rachel van Elkan said: “So the more money that’s put on the table that can facilitate the progression of infrastructure, as long as it’s done efficiently and the risks are well managed, it’s a good outcome. The IMF would be happy to contribute its accumulative knowledge on good practice in infrastructure management.”

Nick Kwan, a director of research at the Hong Kong Trade Development Council told this publication that “there are clear development financing gaps not being filled by existing institutions” and that “the AIIB should play supplementary role”.

Meanwhile the Chinese President Xi Jinping has pledged that the AIIB will be an institution characterised by “openness, inclusiveness and mutual benefit”.

The leadership structure will be voted on by each of the member states, with China – again – holding veto. An early frontrunner for the role of President is Liqun Jin, a former ADB staffer, who has been the interim secretariat while the bank has gone through its early stages of development.

Jin is also the chairman of the Board of Supervisors for China’s sovereign wealth fund, and former vice-president of finance for China.

Analysts are expecting the AIIB and the New Development Bank (NDB, also known as the BRICS Bank) to work closely together.

“Asia Pacific region’s share of world GDP is projected to rise from 33% in 2015 to 38% by 2025, which will also support the expansion of the AIIB’s balance sheet and lending capacity,” Rajiv Biswas, IHS


Chief Economist for Asia Pacific at IHS, Rajiv Biswas, says: “The exact annual lending levels will be determined by a complex mix of factors, but the key point is that the creation of the AIIB and NDB will allow the future growth of the Chinese and Indian economies to be readily matched by increased subscriptions to the AIIB and NDB.

“If the total size of the Chinese and Indian economies does indeed reach 24% of the world GDP by 2025, as IHS long-term projections indicate, this would result in very sizeable increases in the AIIB and NDB’s total capitalisation and in its annual leading to developing countries. Furthermore, the Asia Pacific region’s share of world GDP is projected to rise from 33% in 2015 to 38% by 2025, which will also support the expansion of the AIIB’s balance sheet and lending capacity.”

The AIIB launches along with the One Belt One Road Silk Road initiative, which will see China expand its economic influence across a massive series of maritime and land projects spanning from Australia to Western Europe, and also across the African continent.

The full list of the founder nations, as well as their vote allocation and financial contribution is as follows:

country type % shares % voting
China regional 30.34% 26.06%
India regional 8.52% 7.51%
Russia regional 6.66% 5.93%
Germany non-regional 4.57% 4.15%
Korea regional 3.81% 3.50%
Australia regional 3.76% 3.46%
France non-regional 3.44% 3.19%
Indonesia regional 3.42% 3.17%
Brazil non-regional 3.24% 3.02%
United Kingdom non-regional 3.11% 2.91%
Turkey regional 2.66% 2.52%
Italy non-regional 2.62% 2.49%
Saudi Arabia regional 2.59% 2.47%
Spain non-regional 1.79% 1.79%
Iran regional 1.61% 1.63%
Thailand regional 1.45% 1.50%
United Arab Emirates regional 1.21% 1.29%
Pakistan regional 1.05% 1.16%
Netherlands non-regional 1.05% 1.16%
Philippines regional 1.00% 1.11%
Poland non-regional 0.85% 0.98%
Israel regional 0.76% 0.91%
Kazakhstan regional 0.74% 0.89%
Switzerland non-regional 0.72% 0.87%
Vietnam regional 0.68% 0.84%
Bangladesh regional 0.67% 0.83%
Egypt non-regional 0.66% 0.83%
Sweden non-regional 0.64% 0.81%
Qatar regional 0.62% 0.79%
South Africa non-regional 0.60% 0.77%
Norway non-regional 0.56% 0.74%
Kuwait regional 0.55% 0.73%
Austria non-regional 0.51% 0.70%
New Zealand regional 0.47% 0.66%
Denmark non-regional 0.38% 0.58%
Finland non-regional 0.32% 0.53%
Sri Lanka regional 0.27% 0.50%
Myanmar regional 0.27% 0.49%
Oman regional 0.26% 0.49%
Azerbaijan regional 0.26% 0.48%
Singapore regional 0.25% 0.48%
Uzbekistan regional 0.22% 0.45%
Jordan regional 0.12% 0.37%
Malaysia regional 0.11% 0.36%
Nepal regional 0.08% 0.33%
Luxembourg non-regional 0.07% 0.32%
Portugal non-regional 0.07% 0.32%
Cambodia regional 0.06% 0.32%
Georgia regional 0.05% 0.31%
Brunei regional 0.05% 0.31%
Laos regional 0.04% 0.30%
Mongolia regional 0.04% 0.30%
Tajikistan regional 0.03% 0.29%
Kyrgyzstan regional 0.03% 0.29%
Iceland non-regional 0.02% 0.28%
Malta non-regional 0.01% 0.27%
Maldives regional 0.01% 0.27%

Source: AIIB