ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB)

INTRODUCTION
The Asian Infrastructure Investment Bank is a multilateral development bank created to address the massive infrastructure financing needs of Asia. For beginners in International Relations, AIIB helps in understanding new development institutions led by emerging economies and the shift in global economic governance. From an OPSC prelims perspective, AIIB is a high-value static topic because questions are frequently asked on its origin, objectives, membership, capital structure, and India’s role.

ORIGIN AND BACKGROUND
• Proposed by China in 2013
• Articles of Agreement came into force in 2015
• Started operations in 2016
• Created to complement existing multilateral development banks like World Bank and ADB
• Focus on addressing Asia’s infrastructure deficit

HEADQUARTERS AND MEMBERSHIP
• Headquarters: Beijing, China
• Total approved members: over 100 countries
• Includes Asian and non-Asian members
• India is a founding member and second-largest shareholder

OBJECTIVES OF AIIB
• Promote sustainable economic development in Asia
• Support infrastructure development and connectivity
• Foster regional cooperation and partnership
• Mobilise private capital for infrastructure projects

CORE FUNCTIONS
• Provides loans and equity investments
• Focuses on infrastructure sectors such as:
  – Transport
  – Energy
  – Urban development
  – Water and sanitation
  – Digital infrastructure
• Emphasises sustainable and green infrastructure

CAPITAL STRUCTURE AND GOVERNANCE
• Authorised capital: USD 100 billion
• Voting power based on shareholding
• Major shareholders include China, India, and Russia
• Board of Governors – highest authority
• Board of Directors – oversees operations
• President – heads the bank

LENDING FEATURES
• Project-based financing
• Faster approval process compared to older MDBs
• Emphasis on efficiency and lean structure
• Co-financing with World Bank, ADB and other institutions

INDIA AND AIIB
• India is the second-largest shareholder
• One of the largest recipients of AIIB funding
• AIIB supports Indian projects in transport, energy and urban infrastructure
• India plays an active role in governance and decision-making

CURRENT RELEVANCE
• Increased funding for climate-resilient infrastructure
• Focus on green energy and sustainable development
• Expansion of AIIB-funded projects across Asia

PRELIMS NOTES AND COMMON CONFUSIONS
• AIIB is not a Chinese national bank
• AIIB is different from ADB and World Bank
• AIIB does not replace existing development banks
• AIIB focuses mainly on infrastructure financing

CONCLUSION
The Asian Infrastructure Investment Bank represents a new phase in global development finance led by emerging economies. For OPSC prelims, AIIB is a must-read static topic due to its fixed facts and repeated appearance in current affairs. A clear understanding of AIIB’s structure and objectives helps beginners confidently handle MCQs related to multilateral development institutions.
 

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Subject: International Relation

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