Business / Economy

AIIB vows to engage private sector across world in Asia's infrastructure investment

(Xinhua) Updated: 2015-09-21 13:53

When asked about how to cope with regional risks and domestic constrains while promoting projects in these countries, Jin said economic progress will naturally push the government to deal with the regulatory constraints.

"I would say, quite a number of developing countries in Asia are fully aware of the regular trade constraints and the red tape which would be adversely affecting the preparation of the projects. I think we should be realistic, about how fast the government in all this countries would be able to solve some of these issues. But I do believe that as long as we help them develop the basic infrastructure and economy, and they would be naturally and logically kind of push for the reform in some of these countries. When you have great demand for the manufacturing, services, and the government would be more conscious of the urgency, to deal with the regulatory issues," he explained.

The Beijing-headquartered bank is expected to start operation at the end of the year under two preconditions, At least 10 prospective members sign the agreement, and the initial subscribed capital is no less than 50 percent of the authorized capital. So far, two countries, including Singapore, have completed the process, Jin stated, adding that he hopes to launch the first batch of projects no later than the second quarter of 2016.

In regards to the launching of programs, one big issue would be effectiveness. China has reiterated many times that the AIIB would be lean in its management, and Jin, as the president-designate of the bank, said the difference of AIIB from the existing organizations would be no duplication of the jobs and responsibilities within the bank.

"We should, for instance, have the management bear the responsibility, the decision-making in the specific projects or programs, the board, in my view, should take care of the overall policies, but should not be directly involved in the specific projects or programs. That could make things faster. However, we should understand, if the board delegates the authority to management to approve the specific project, the management must be held accountable."

Another key player would be local governments, Jin stressed.

"If we can encourage the project sponsors and local governments to take more responsibility, you can help them develop their institutional capability, instead of being a nanny, to tell them to do this, to do that, you actually deprive them of the initiative to prepare things on their own." He took China for example, saying that over the last three decades, China's management capability improved through developing its own infrastructure programs. "It's learning by doing process," he said.

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