Backgrounder: The Asian Infrastructure Investment Bank—Steps in Approving New Members
With the aim to support infrastructure in the Asia-Pacific region, the Asian Infrastructure Investment Bank (AIIB) became operational in January 2016, during its inaugural Board of Governors meeting. With a total capital of US$100 billion, it is comparable in size to other multilateral development banks. Currently, there are 57 members, with regional members holding 75 per cent of the Bank's capital. China is the largest shareholder. Canada would become a non-regional member.
The AIIB will complement and cooperate with the existing multilateral development banks in the region to jointly address the estimated $8 trillion infrastructure gap in Asia. Its focus will be on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation, telecommunications, agriculture development, and environmental protection.
Since its inception, the AIIB has agreed upon co-financing arrangements with the World Bank Group, the Asian Development Bank, and the European Bank for Reconstruction and Development. These projects include key upgrades to urban infrastructure and crucial improvements to transportation routes in the region, which are vital factors to enhancing economic and social development outcomes in Asia.
At its first Annual Meeting in June 2016, the AIIB announced a formal process for admitting new members. Potential members have until September 30, 2016 to signal their interest in joining the Bank. Membership in the Bank is open to members of the World Bank Group's International Bank for Reconstruction and Development and the Asian Development Bank.
Similar to the governance structure of other international financial institutions, every member of the Bank is represented on the Board of Governors. There is also representation by the Board of Directors, which is elected by the Governors and is composed of 9 regional members and 3 non-regional members. While some powers have been delegated to the Bank's 12-member Board of Directors, the authority to approve membership requests rests with the AIIB's Board of Governors.
Existing members have until December 31, 2016 to complete their domestic ratification processes and indicate if they are subscribing to their full shareholding allotment. The Bank's Governors could approve new members in early 2017 and allocate available shareholdings. The size of Canada's shareholding would be decided at that time.