Context:
- The Government of India has applied for loans from the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) to procure as many as 667 million doses of COVID-19 vaccines.
- The ADB is expected to lend $1.5 billion and the AIIB around $500 million for the vaccine purchase by the Government of India, which has been made under the ADB’s Asia Pacific Vaccine Access Facility (APVAX) initiative.
- Recently, the Union Minister of Finance participated in the 6th Annual Meeting of the Board of Governors of Asian Infrastructure Investment Bank (AIIB).
Relevance:
GS-III: Indian Economy (International Institutions), GS-II: International Relations
Dimensions of the Article:
- About Asian Infrastructure Investment Bank:
- Membership of AIIB
- Financial Capital of AIIB:
- India and AIIB (updates as of 2021)
- About Asian Development Bank (ADB)
About Asian Infrastructure Investment Bank:
- The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia-Pacific region.
- It is headquartered in Beijing.
- It commenced operations in January 2016.
- By investing in sustainable infrastructure and other productive sectors today, it aims to connect people, services and markets that over time will impact the lives of billions and build a better future.
Membership of AIIB
Membership in the AIIB is open to all members of the World Bank or the Asian Development Bank and is divided into regional and non-regional members.
- Regional members are those located within areas classified as Asia and Oceania by the United Nations.
- Unlike other MDBs (multilateral development bank), the AIIB allows for non-sovereign entities to apply for AIIB membership, assuming their home country is a member.
- Thus, sovereign wealth funds (such as the China Investment Corporation) or state-owned enterprises of member countries could potentially join the Bank.
- The China-led Asian Infrastructure Investment Bank (AIIB) has officially approved 57 nations as prospective founding members, with Sweden, Israel, South Africa, Azerbaijan, Iceland, Portugal and Poland the latest to be included.
- Countries accepted as AIIB founding members include China, India, Malaysia, Indonesia, Singapore, Saudi Arabia, Brunei, Myanmar, the Philippines, Pakistan, Britain, Australia, Brazil, France, Germany and Spain.
- Founding members have priority over nations that sign up later because they will have the right to set the rules for the bank.
- As of May, 2020, the bank currently has 78 members as well as 24 prospective members from around the world.
Financial Capital of AIIB:
- The AIIB’s initial total capital is USD 100 billion divided into 1 million shares of 100 000 dollars each, with 20% paid-in and 80% callable.
- Paid-Up Share Capital: It is the amount of money that has already been paid by investors in exchange for shares of stock.
- Called-Up Share Capital: Some companies may issue shares to investors with the understanding they will be paid at a later date.
- This allows for more flexible investment terms and may entice investors to contribute more share capital than if they had to provide funds up front.
- China is the largest contributor to the Bank, contributing USD 50 billion, half of the initial subscribed capital.
- India is the second-largest shareholder, contributing USD 8.4 billion.
- Voting Rights:
- China is the largest shareholder with 26.61 % voting shares in the bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).
- The regional members hold 75% of the total voting power in the Bank.
India and AIIB (updates as of 2021)
- India was among the AIIB’s 57 founding members in 2016.
- It is also its second-largest shareholder (with 7.62% voting shares) after China (26.06%).
- It has received USD 4.35 billion from AIIB which is the highest of any country, with the bank so far approving loans of USD 19.6 billion to support 87 projects in 24 countries.
- AIIB has approved financing projects in India in a host of sectors like energy, transport and water including the Bangalore metro rail project (USD 335 million), Gujarat rural roads project (USD 329 million) and Phase 3 of the Mumbai urban transport project (USD 500 million).
- Based on the stance taken in the 6th Annual Meeting of the Board of Governors of Asian Infrastructure Investment Bank (AIIB) in 2021 by India – India is unlikely to alter its engagement with the China-led Asian Infrastructure Investment Bank (AIIB), despite a host of offensive measures announced recently to reduce its trade and investment links with China.
About Asian Development Bank (ADB)
- The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966 to promote social and economic development in Asia.
- It is headquartered in the city of Mandaluyong, Metro Manila, Philippines.
- The ADB was modeled closely on the World Bank and an official United Nations Observer.
- Japan holds the largest proportion of shares in ADB followed by the USA, and it has a weighted voting system where votes are distributed in proportion with members’ capital subscriptions (just like the World Bank).
- The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.
- ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
- ADB aids in reducing poverty through investments in the form of loans, grants and information sharing (in infrastructure, health care services, financial and public administration systems), helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.
- ADB is an official United Nations Observer.
- India was a founding member of the Asian Development Bank (ADB) in 1966 and is now the bank’s fourth largest shareholder and top borrower.
-Source: The Hindu
Context:
- The Government of India has applied for loans from the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) to procure as many as 667 million doses of COVID-19 vaccines.
- The ADB is expected to lend $1.5 billion and the AIIB around $500 million for the vaccine purchase by the Government of India, which has been made under the ADB’s Asia Pacific Vaccine Access Facility (APVAX) initiative.
- Recently, the Union Minister of Finance participated in the 6th Annual Meeting of the Board of Governors of Asian Infrastructure Investment Bank (AIIB).
Relevance:
GS-III: Indian Economy (International Institutions), GS-II: International Relations
Dimensions of the Article:
- About Asian Infrastructure Investment Bank:
- Membership of AIIB
- Financial Capital of AIIB:
- India and AIIB (updates as of 2021)
- About Asian Development Bank (ADB)
About Asian Infrastructure Investment Bank:
- The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia-Pacific region.
- It is headquartered in Beijing.
- It commenced operations in January 2016.
- By investing in sustainable infrastructure and other productive sectors today, it aims to connect people, services and markets that over time will impact the lives of billions and build a better future.
Membership of AIIB
Membership in the AIIB is open to all members of the World Bank or the Asian Development Bank and is divided into regional and non-regional members.
- Regional members are those located within areas classified as Asia and Oceania by the United Nations.
- Unlike other MDBs (multilateral development bank), the AIIB allows for non-sovereign entities to apply for AIIB membership, assuming their home country is a member.
- Thus, sovereign wealth funds (such as the China Investment Corporation) or state-owned enterprises of member countries could potentially join the Bank.
- The China-led Asian Infrastructure Investment Bank (AIIB) has officially approved 57 nations as prospective founding members, with Sweden, Israel, South Africa, Azerbaijan, Iceland, Portugal and Poland the latest to be included.
- Countries accepted as AIIB founding members include China, India, Malaysia, Indonesia, Singapore, Saudi Arabia, Brunei, Myanmar, the Philippines, Pakistan, Britain, Australia, Brazil, France, Germany and Spain.
- Founding members have priority over nations that sign up later because they will have the right to set the rules for the bank.
- As of May, 2020, the bank currently has 78 members as well as 24 prospective members from around the world.
Financial Capital of AIIB:
- The AIIB’s initial total capital is USD 100 billion divided into 1 million shares of 100 000 dollars each, with 20% paid-in and 80% callable.
- Paid-Up Share Capital: It is the amount of money that has already been paid by investors in exchange for shares of stock.
- Called-Up Share Capital: Some companies may issue shares to investors with the understanding they will be paid at a later date.
- This allows for more flexible investment terms and may entice investors to contribute more share capital than if they had to provide funds up front.
- China is the largest contributor to the Bank, contributing USD 50 billion, half of the initial subscribed capital.
- India is the second-largest shareholder, contributing USD 8.4 billion.
- Voting Rights:
- China is the largest shareholder with 26.61 % voting shares in the bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).
- The regional members hold 75% of the total voting power in the Bank.
India and AIIB (updates as of 2021)
- India was among the AIIB’s 57 founding members in 2016.
- It is also its second-largest shareholder (with 7.62% voting shares) after China (26.06%).
- It has received USD 4.35 billion from AIIB which is the highest of any country, with the bank so far approving loans of USD 19.6 billion to support 87 projects in 24 countries.
- AIIB has approved financing projects in India in a host of sectors like energy, transport and water including the Bangalore metro rail project (USD 335 million), Gujarat rural roads project (USD 329 million) and Phase 3 of the Mumbai urban transport project (USD 500 million).
- Based on the stance taken in the 6th Annual Meeting of the Board of Governors of Asian Infrastructure Investment Bank (AIIB) in 2021 by India – India is unlikely to alter its engagement with the China-led Asian Infrastructure Investment Bank (AIIB), despite a host of offensive measures announced recently to reduce its trade and investment links with China.
About Asian Development Bank (ADB)
- The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966 to promote social and economic development in Asia.
- It is headquartered in the city of Mandaluyong, Metro Manila, Philippines.
- The ADB was modeled closely on the World Bank and an official United Nations Observer.
- Japan holds the largest proportion of shares in ADB followed by the USA, and it has a weighted voting system where votes are distributed in proportion with members’ capital subscriptions (just like the World Bank).
- The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.
- ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
- ADB aids in reducing poverty through investments in the form of loans, grants and information sharing (in infrastructure, health care services, financial and public administration systems), helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.
- ADB is an official United Nations Observer.
- India was a founding member of the Asian Development Bank (ADB) in 1966 and is now the bank’s fourth largest shareholder and top borrower.
-Source: The Hindu
