Promoting regional connectivity: AIIB to provide financing support to developing states in Asia: Dar

Minister for Finance Senator Mohammad Ishaq Dar has said that Asian Infrastructure Investment Bank (AIIB) would provide financing support to developing countries in Asia including Pakistan for infrastructure development to promote regional connectivity.
"We believe that Bank will constitute an important platform to convert the abundant savings available in the region into investment to help regional economies in sustainable and rapid development, and to contribute to the world economy," he told leading Chinese media during his visit to Beijing including Global Times, China Daily and Chinese Central Television after the decision of the establishment of AIIB in Beijing the other day.
In his interview with Global Times, he said that he had attended the ministerial meeting of the prospective founding members of Asian Infrastructure Investment Bank (AIIB) after the signing of the MoU for the establishment of AIIB.
The ministerial meeting, he said discussed setting up of the Multilateral Interim Secretariat which will carry out the work on the Articles of Agreement of the proposed Bank. "We also discussed the roadmap so that this work is completed by the end of 2015 and the Bank is up and running by the beginning of 2016," he remarked.
When asked how does he evaluates the role that the AIIB would play in the development of Asia and how Pakistan would benefit from the bank, Ishaq Dar said that the bank would help meet Asia's financing needs for infrastructure development and regional connectivity.
"As China eases restrictions on inflows and outflows of capital and the RMB becomes convertible, the bank could be important for tapping China's excess savings and putting them to good use in developing other parts of Asia", he said.
Mr.Dar said the Bank would complement the efforts of the existing multilateral development banks (MDBs) rather than compete. He added it would cooperate because, for many large projects, co-financing makes sense.
However, the Bank, he said would aim to be leaner and faster than the existing institutions, and that is the kind of healthy competition that it would give to the other MDBs.
He said in our country, the need for developing new infrastructure is immense. However, he said existing resources do not allow us to meet many of these needs.
In his interview with CHINA DAILY, Ishaq Dar said the basic idea underlying the AIIB was clear to harness the region's vast financial resources and development expertise acquired in recent decades to improve regional connectivity and infrastructure.
In this connection, he said China surely has a huge role to play. "Let me also say that we continue to hear that 21st century is Asia's century. However, this is only possible if Asia, which has all other fundamentals right, can supplement these fundamentals with meeting the infrastructural deficits. China's leadership has shown great vision and farsightedness in assuming the role of leading this initiative," he remarked.
Dar said: "We expect that the Bank will provide financing support to developing countries in Asia for infrastructure development to promote regional connectivity. We believe that Bank will constitute an important platform to convert the abundant savings available in the region into investment to help regional economies in sustainable and rapid development, and to contribute to the world economy.
AIIB would provide financing support for meeting infrastructure needs of the Asian Countries including Pakistan."
Dar said "We as founding members have supported the view that the Bank should be open for membership to all interested Asian countries. I also expect it to co-operate with other sources of funding-notably the Asian Development Bank (ADB), of which China is a member itself. Pakistan appreciates this initiative. I can say one thing with full conviction that, whatever initiative China takes, there is a lot of wisdom in it."
He said that as in the past, "we would continue to fully participate in the growth and development of AIIB."
Pakistan, he said is a founding member of AIIB and it affords it ample opportunity to participate in decision making.
"We would like this Bank to be inclusive in development, transparent in its business and a game changer for Continent Asia and the rest of the world", he remarked.
To a question, he said "We believe that this financing initiative will provide China a greater and important role over infrastructure development in various Asian countries. Such an institution shall be effective in enhancing goodwill for China."
This, he said is important since the region needs to benefit from China's exemplary growth and development in the last three decades.
Replying to another question, he said that despite economic advancement, most emerging Asian countries, including China, India, ASEAN and South Asia region continue to suffer from underdeveloped infrastructure.
Finance Minister Ishaq Dar said that China had been a long trusted friend of Pakistan and a collective regional approach toward countering issues and meeting challenges would benefit both the countries.
"Economic development and mutual prosperity are our common goals. China has been working hard to achieve it. It is our belief that Pakistan can act as a force multiplier for China and we will continue to work towards this end," he remarked.
"We will like to give a strong message not only to the government but also the private investors to come and invest in Pakistan as it is going to be a leading economy of the world and doing business in the country is much more easier than in many other countries of the world," he said.
Dar said that Surveys have already declared Pakistan to be likely to be the second choicest place for investment in the world.
"Likewise, Goldman Sachs economist Jim O'Neill and BBC have together forecasted that Pakistan would become world's 18th largest economy by the year 2050 from its current position of 44th. My dream and my wish is that while we would want this to happen faster than that," he remarked.
Dar said that New Silk Road projects are instrumental in laying the foundation for regional co-operation, improving economic growth, offering trade diversifications, investing in transportation, and in mining and energy sectors.
"All of these represent a historically unprecedented chance for the regional countries to come together and become important players in the world economy," he remarked.
In his interview with CHINA CENTRAL TELEVISION, Senator Ishaq Dar said that he would say that, like a number of other positive initiatives, AIIB shall prove to be another "great leap forward", not only for China but also for developing countries in Asia, particularly ASEAN, who would receive much needed support for nfrastructure development.
"The structure of this institution is still on the drawing board, but I wish to comment that unlike the picture being painted by some that it would undercut the ADB or the WB, it would rather provide a healthy competition to the existing financial institutions which now have to rethink their funding strategy to projects which are otherwise not high priority for them," he remarked.
Ishaq Dar said that after detailed consultative process MoU has been finalised for signing, the structure and other Articles of agreement would be decided after further mutual consultations among prospective founding members.
"It will be ensured that the design and strategy of the new bank is consistent with best practice" he said.
The AIIB, he said would distinguish itself from other Multilateral Development Banks (MDB) on the following counts:
- MDBs major focus is on poverty reduction while AIIB will focus on infrastructure and regional connectivity.
-The decision making in other MDBs eg Asian Development Bank (ADB) and the World Bank (WB) is often influenced by the west and allocation of funds follows accordingly. AIIB would be free from any such influence.
He said that in the discussions carried out in the finalisation of the MOU, it has been agreed that the Bank will remain a lean machine rather heavy on bureaucracy and low on output.
This regional Bank, he said would provide an excellent framework for decisions about projects and financing, particularly those with cross-border implications at regional level.
Dar said that Pakistan has always extended support to China at regional and international fora.
"We believe this is another of China's sincere efforts to help out developing countries that are left out of the race for economic development otherwise due to lack of support from international financial institutions," he remarked.
The Banks which have been previously shouldering responsibilities for lending are already overburdened. There had to be some institution that could come in handy at this critical juncture. Infrastructure development and poverty alleviation is badly needed for some nations in Asia to ward off the dangers of extremism. "I think AIIB is a hope for all of us in Asia." Pakistan, he said could benefit from AIIB in the form of funding for its infrastructure development projects, particularly in the fields of energy and transportation.