AIIB could finance quality development

Mobilizing finance for infrastructure in Asia is a critical need. In 2009, the Asia Development Bank estimated that Asian countries would require approximately $8 trillion in infrastructure investment from 2010 to 2020 if they are to maintain current levels of economic growth, but warned that there would only be limited funding for this available. With its authorized capital already estimated to have reached nearly $100 billion, the recently-launched Asian Infrastructure Investment Bank, which has the support of all the members of the Association of Southeast Asian Nations and BRICS, as well as most G20 countries, among others, is in a position to make a significant contribution toward closing the financing gap and thus promoting Asian economic development.

To ensure its investments will not only support growth but also directly benefit - and bring no harm - to developing countries and people living in poverty, the AIIB has recently issued a draft Environmental and Social Framework. The ESF is open for public consultation until the end of this week.

Establishing an ESF is definitely a step in the right direction. Environmental and social safeguard policies have traditionally been treated as risk mitigation approaches by investors. However, there is growing recognition that sound environmental and social practices are crucial for successful investments and long-term sustainable project outcomes.