The AIIB is ready for busi­ness

Financial Mirror (Cyprus) - - FRONT PAGE -

The his­toric launch of the Asian In­fra­struc­ture In­vest­ment Bank in the com­ing weeks has been highly an­tic­i­pated – and rightly so. With the start of oper­a­tions, the AIIB will join the fam­ily of mul­ti­lat­eral fi­nan­cial in­sti­tu­tions in sup­port­ing broad­based eco­nomic and so­cial de­vel­op­ment in Asia.

Sound and sus­tain­able in­fra­struc­ture in­vest­ment will lead to bet­ter de­vel­op­ment out­comes, im­prove the lives and liveli­hoods of Asia’s cit­i­zens, and gen­er­ate pos­i­tive spillover ef­fects in other parts of the world.

Over the past year, meet­ing with peo­ple from around the world and var­i­ous walks of life, I have fre­quently been asked to ex­plain why an­other mul­ti­lat­eral de­vel­op­ment bank is needed, and how the how AIIB will be dif­fer­ent from, say, the World Bank or the Asian De­vel­op­ment Bank.

The an­swers are clear. The role and im­por­tance of Asia in the in­ter­na­tional arena have in­creased, yet the re­gion faces se­vere in­fra­struc­ture gaps and thorny bot­tle­necks. Asia’s in­fra­struc­ture in­vest­ment needs have grown ex­po­nen­tially, and the AIIB’s re­sources, quite sim­ply, will in­crease the pool of mul­ti­lat­eral re­sources avail­able to help meet them.

There is, more­over, am­ple space for the AIIB to help its mem­bers to mod­ernise roads, rails, and ports; en­hance ac­cess to elec­tric­ity; ex­pand telecom­mu­ni­ca­tions ser­vices; ad­vance ur­ban plan­ning; and pro­vide clean wa­ter and san­i­ta­tion ser­vices. We will do it well. We will do it right. And we will do it col­lab­o­ra­tively, as a re­li­able and com­ple­men­tary de­vel­op­ment part­ner.

The AIIB’s found­ing mem­bers have a clear man­age­ment vi­sion: We will set a clear and high bar for or­gan­i­sa­tional per­for­mance and gov­er­nance, by up­hold­ing open­ness, trans­parency, ac­count­abil­ity, and in­de­pen­dence its core in­sti­tu­tional prin­ci­ples.

Our char­ter places direct ac­count­abil­ity with the AIIB’s man­age­ment to en­sure that th­ese prin­ci­ples be­come or­ganic val­ues, not sim­ply slogans. I em­brace this chal­lenge, and I am firmly com­mit­ted to fos­ter­ing an in­sti­tu­tional cul­ture grounded in the high­est prin­ci­ples and eth­i­cal stan­dards.

How will we do this? In draft­ing the AIIB’s Ar­ti­cles of Agree­ment and pol­icy frame­work, we have worked with a di­verse group of in­ter­na­tional ex­perts to draw lessons from the ex­ist­ing mul­ti­lat­eral in­sti­tu­tions and from suc­cess­ful pri­vate-sec­tor com­pa­nies. We have held ex­ten­sive rounds of tech­ni­cal dis­cus­sions with our share­hold­ers to en­sure that the Bank re­flects its own­ers’ goals and as­pi­ra­tions in both its lend­ing ac­tiv­i­ties and in­ter­nal oper­a­tions. I am con­fi­dent that the Bank’s pol­icy foun­da­tion meets world-class stan­dards. We are now re­cruit­ing a top­cal­i­bre man­age­ment team and ex­pert staff to en­sure their ef­fec­tive im­ple­men­ta­tion.

In ex­e­cut­ing our man­date, our share­hold­ers will see to it that the Bank learns from the past and recog­nises the pos­si­bil­i­ties of the fu­ture – to do things dif­fer­ently and to do dif­fer­ent things. Sev­eral of the AIIB’s dis­tin­guish­ing fea­tures will fa­cil­i­tate this.

For starters, the AIIB’s unique own­er­ship and share­hold­ing struc­tures re­flect the institution’s re­gional char­ac­ter and pro­vide mem­bers with a greater voice in pol­icy

as di­rec­tion and de­ci­sion-making. The rich di­a­logue among found­ing mem­bers dur­ing the de­vel­op­ment of the AIIB’s Ar­ti­cles of Agree­ment and pol­icy frame­work at­tests to our share­hold­ers’ strong own­er­ship of, and com­mit­ment to, the Bank’s man­date and mis­sion.

More­over, the AIIB’s spe­cial­ized ge­o­graphic and sec­toral man­date will en­able it to of­fer niche skills, fo­cused ex­per­tise, and con­cen­trated mar­ket knowl­edge, and its or­gan­i­sa­tional struc­ture, staffing flex­i­bil­ity, and ef­fi­cient de­ci­sion-making pro­cesses will po­si­tion it to re­spond with agility to client de­mand and emerg­ing needs. Our ap­proach to re­search will be se­lec­tive and strate­gic, and our re­sults-fo­cused busi­ness model will al­low us to de­liver state-of-the-art knowl­edge and tai­lored fi­nan­cial ser­vices.

The AIIB will play a cat­alytic role. We will lever­age and mo­bilise pub­lic and pri­vate fi­nanc­ing, in­clud­ing from in­sti­tu­tional in­vestors, and help clients to en­hance project “bank­a­bil­ity” by pro­mot­ing trans­parency, ef­fi­ciency, and ad­her­ence to ac­cepted stan­dards – in­clud­ing en­vi­ron­men­tal and so­cial stan­dards – thereby re­duc­ing risk.

The Bank’s in­te­grated or­gan­i­sa­tional de­sign and gov­er­nance will en­sure ef­fi­cient and ef­fec­tive oper­a­tions in align­ment with its strate­gic goals and or­gan­i­sa­tional val­ues. Its non-res­i­dent Board will pro­mote ac­count­abil­ity, ef­fi­ciency, and cost ef­fec­tive­ness, while play­ing an en­hanced role in set­ting strat­egy, es­tab­lish­ing pol­icy, and ex­er­cis­ing over­sight.

Ul­ti­mately, the AIIB’s rep­u­ta­tion and cred­i­bil­ity will de­pend on the cal­i­bre of its staff. We will re­cruit the best tal­ent on the mar­ket through merit-based com­pet­i­tive pro­cesses, with­out re­gard to a can­di­date’s na­tion­al­ity. Like­wise, there will be no na­tion­al­ity re­stric­tion on pro­cure­ment of goods and oper­a­tions.

Our oper­a­tions will be lean, clean, and green. That means keep­ing a check on bu­reau­cracy and main­tain­ing a rel­a­tively flat or­gan­i­sa­tional struc­ture; man­ag­ing costs and us­ing mod­ern tech­nol­ogy ef­fec­tively; and avoid­ing du­pli­ca­tion and over­lap of func­tions. The AIIB will build its pro­fes­sional staff grad­u­ally, sup­ple­ment­ing in-house ex­per­tise with spe­cialised con­sul­tant skills. Staff po­si­tions will be care­fully de­fined to avoid both un­der­em­ploy­ment and fu­ture re­dun­dan­cies.

It also means fos­ter­ing an in­sti­tu­tional cul­ture based on pro­fes­sional in­tegrity and ex­em­plary gov­er­nance, with no tol­er­ance for cor­rup­tion. The best poli­cies on pa­per are mean­ing­less un­less they are im­ple­mented rig­or­ously, im­par­tially, and trans­par­ently.

Fi­nally, it means con­cern for sus­tain­abil­ity. The AIIB sub­scribes to the prin­ci­ples of sus­tain­able de­vel­op­ment in the iden­ti­fi­ca­tion, prepa­ra­tion, and im­ple­men­ta­tion of projects. The man­age­ment of en­vi­ron­men­tal and so­cial risks and im­pacts is cen­tral to suc­cess­ful de­vel­op­ment out­comes. We will sup­port our clients in man­ag­ing th­ese risks ap­pro­pri­ately through knowl­edge, ex­pe­ri­ence, and re­sources.

The AIIB is an institution of great prom­ise in a re­gion with great needs. As it opens its doors for busi­ness in 2016, I am fully con­fi­dent that it will re­alise its po­ten­tial, meet­ing – and striv­ing to ex­ceed – the goals and stan­dards set by its share­hold­ers.




Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.