AIIB agreement meets high standards, implementation to be 'real test'

WASHINGTON - The Agreement of the Asian Infrastructure Investment Bank (AIIB) meets international high standards, but faces a key test of implementation as the China-initiated institution aims to start operation at the end of the year, a US expert said.

"AIIB's Articles of Agreement is very similar to that of the World Bank," David Dollar, senior fellow with the Brookings Institution and former official of the World Bank and the US Treasury Department, told Xinhua in an interview, referring to the 60-article agreement that outlined the governance structure and policy-making mechanism of the new multilateral institution.

"I think it's quite impressive that China pulled together this initiative and got nearly 60 countries to sign up, putting together these professional and international-standard articles of agreement," Dollar said, who also works as an unpaid consultant to the AIIB.

According to the articles, the bank will have an authorized capital of $100 billion, with $29.78 billion provided by China, as the bank's largest shareholder holding a 30.34 percent stake and 26.06 percent of voting shares.

As the bank goes from theory to reality, "the real test is going to be implementation," Dollar said, noting that implementation is often very slow in the World Bank and "the clients complain about this."  

China has formally nominated Jin Liqun, secretary-general of the interim multilateral secretariat for establishing the AIIB, as candidate for the first president of the bank.

"So I know the challenge for Jin is... can this bank be more efficient, can it operate quickly and still meet high environmental standards?" Dollar said.

Jin has spent the past few months shuttling between countries to convince them to join the bank and has earned a reputation for his flexible approach.

"I had opportunities to interact with him for a long time, so I have very high regard for his abilities," Dollar said, noting that Jin had represented China in the World Bank while serving as vice president of the Asian Development Bank, a senior official of China's sovereign fund and the country's vice finance minister.

"He has lots of experience with development banks. So I think he is the excellent choice to head the bank," Dollar said.

The bank is expected to start operation at the end of the year under two preconditions: at least 10 prospective members sign the agreement and the initial subscribed capital is no less than 50 percent of the authorized capital.

Dollar believed money will not become a problem for the bank's operation as it's well capitalized.