China-Led Development Bank Starts With $509 Million in Loans for 4 Projects
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Version 0 of 1. BEIJING — A new Chinese-led international development bank announced its first four loans on Saturday, pledging to lend $509 million for projects to spread electric power in rural Bangladesh, upgrade living conditions in slums in Indonesia, and improve roads in Pakistan and Tajikistan. At the first of the annual general meetings of the institution, the Asian Infrastructure Investment Bank, the bank’s president, Jin Liqun, said the projects were financially sound and environmentally friendly and had been accepted by the people in the project areas. The projects of the 57-member bank, founded last year as an effort by China to both challenge lending institutions and cooperate with them, are relatively modest. The road in Tajikistan is just three miles long, but it will help clear traffic congestion on an important trading route near the capital, Dushanbe. A $100 million loan to Pakistan is for 40 miles of highway in Punjab Province that would complete the last section of a national artery, the M-4, the bank said. Three of the projects are being financed with other institutions — the Asian Development Bank, the World Bank, and the European Bank for Reconstruction and Development — an approach that allowed the new bank to begin the projects quickly. The bank’s $165 million loan to expand electricity in rural areas of Bangladesh is its only stand-alone project. By financing projects with long-established institutions, the Beijing-based bank was able to move quickly because work on meeting environmental standards and procurement policies had been completed, staff members at the bank said. Although the new bank was China’s idea, it is intended to operate as an international bank dedicated to improving the basic structures and facilities needed to stimulate development across Asia, Mr. Jin said at a news conference on Saturday. Unlike the World Bank and the Asian Development Bank, the Asian Infrastructure Investment Bank places less emphasis on the reduction of poverty, he said. The bank “was born with the birthmark of China, but its upbringing is international,” Mr. Jin said. Referring to the three other institutions that will finance the projects, he said, “We can work wonderfully together.” The new bank is being watched closely. The United States refused to join when it was offered membership in 2014, saying it was uncertain how the bank would measure up on matters of environmental protection, human rights and anticorruption measures long promoted by Western governments and institutions. Japan has also not sought membership in the bank. But President Obama’s administration was mostly concerned that the bank would challenge the current development architecture, the Bretton Woods system established under the leadership of the United States after World War II. In the past year, Mr. Jin has worked to reassure Washington, largely by agreeing to choose projects that have already been approved by the World Bank, the Asian Development Bank and the European bank. He has also emphasized that the new bank will be more streamlined and strive to be “lean, green and clean.” Washington has shown no signs of wanting to join the new bank, but senior Obama administration officials have praised the decision to work with the established institutions and their regimen of standards. Britain was the most eager of the Western democracies to join the bank, and it broke ranks with the United States and became a member in the fall of 2014. Other members of the European Union, including France and Germany, rushed in after Britain. The withdrawal of Britain from the European Union is not expected to affect its relationship with the bank, Mr. Jin said. “I believe the United Kingdom will continue to play an important role in the development of the bank,” he said at the news conference. Asked if he believed that Britain’s decision showed that the old guard was crumbling quicker than he expected, Mr. Jin diplomatically replied that he had detected no such signs. One of five vice presidents of the bank, the British politician Danny Alexander, sat next to Mr. Jin at the news conference. Member countries eagerly sought to fill the positions of vice president, and Mr. Alexander’s appointment was interpreted as a reward to Britain for its critical support of the bank in the face of American opposition. Two dozen countries have expressed interest in joining the bank, and they sent observers to the two-day meeting, Mr. Jin said. The new members would come from Eastern Europe, Latin America and Africa, and could join as early as next year. So far, the bank has 39 permanent professional staff members and about 20 other people working on contracts, a relatively small pool of people for an international bank planning to supervise major contracts. The staff is expected to expand to about 100 by the end of the year, a bank official said. |