WASHINGTON - As representatives of the 57 founding countries gather later this month to prepare for the establishment of the Asian Infrastructure Investment Bank (AIIB), a former World Bank official suggested that the new institution could draw three important lessons from the operational experiences of multilateral development banks over the last five decades to become more successful.
"The first is how important it is to be client-focused, to make sure the clients, the developing countries, to decide what's in their best interests," said Vikram Nehru, a former World Bank chief economist for East Asia and a senior associate in the Asia Program at the Carnegie Endowment for International Peace, a Washington-DC based think tank.
"Ensuring the developing countries in the driver's seat is absolutely central" to the success of the China-proposed AIIB, Nehru told Xinhua in a recent interview on the sidelines of the spring meetings of the International Monetary Fund (IMF) and World Bank.
As a new multilateral institution focusing exclusively on infrastructure development, the AIIB, said China, will be dominated by developing countries, and their requests and demands need to be respected.
The establishment of the AIIB is an attempt to help fill Asia's infrastructure investment gap and promote economic development in the region, China's vice finance minister Zhu Guangyao said Friday in a speech at the Atlantic Council, another US think tank, noting that India and other Asian countries are now facing the same challenge of infrastructure bottleneck.
The Asian Development Bank (ADB) estimated in 2009 that Asia needs about $8 trillion in investment by 2020 to improve the region's battered infrastructure to keep its economies humming.
The second lesson for the AIIB is to be "humble" and " constantly learning from local circumstances, local facts and experiences from other countries to see what works best," said Nehru, who served in a number of senior management positions in the World Bank from 1981 to 2011.
Representatives of the 57 founding countries, which were finalized Wednesday, will convene at the end of April, and May to deliberate on the AIIB charter, of which management structure will be the most important part.
China has said the AIIB will draw experiences from other multilateral development banks and avoid their detours so as to be more cost-effective and efficient. The new bank will feature a three-level management structure that includes a board of governors, board of directors and senior management, according to the Chinese Finance Ministry.
Zhu said there are many debates about whether or not the AIIB should have a resident board of directors commonly adopted by the World Bank and the ADB. The intention of these debates is to " increase efficiency and improve the capacity" of the bank to better serve the clients, but it will be finally decided by coming negotiations among founding members, he said.
Nehru believes it's a good idea to have a non-resident board of directors for the AIIB, as it would help make a clear distinction between the board and the management, and also have great accountability.
"When you have a non-resident board, then when the board meets periodically, it has to focus on the policies of the institution and its strategy, leaving up to the management to implement those policies and that strategy," he said.
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