MARCH 31 — Prime Minister Datuk Seri Najib Razak expressed his confidence in the Asian Infrastructure Investment bank (AIIB) when speaking at the opening plenary session of the Boao Forum for Asia 2015 (BFA), believing that the AIIB will play a pivotal role in the future. Indeed, support for the AIIB given by European countries has fully proven the economic strength of Asia.

The AIIB is an international financial institution proposed by China aiming to provide funding for infrastructure development in Asia. It will be headquartered in Beijing and its authorised capital is US$100 billion (RM371 billion). On October 24 last year, delegates from Malaysia and 20 other countries signed up as founder members of the AIIB in Beijing and as of March 19, at least 32 countries have joined as founder members.

The establishment of AIIB is seen as an action taken by China to fight for a more important and prominent position in the global financial system. It has drawn world attention, while the US posed an antagonistic attitude. However, despite strong condemnation from the US, Europe and Asian countries still joined the AIIB. Europe countries like France, Germany, Italy and Luxembourg followed the footstep of the UK and Switzerland to join the AIIB, and even the chief of International Monetary Fund has said the IMF would be “delighted” to co-operate with the AIIB, highlighting the potential impact of the AIIB on the world economy.

In terms of financial strength, today’s China has gone far beyond all Western countries except for the US. In addition for their own interests, the joining of big countries, including the UK, Germany, France and Italy, is also conforms to the trend of global economic forces restructuring. It also indicates the direction of world financial order, showing that the cooperation between European powers and China through the AIIB will change the pattern of world economy.

The AIIB operates according to the model and principles of multilateral development banks, focusing on supporting and funding infrastructure development of Asian countries. Many Asia-Pacific countries face economic stagnancy mainly due to poor infrastructure and the establishment of AIIB provides a financing platform for these countries, assisting them to strengthen infrastructure and promote economic development and thus, promote the economy of Asia-Pacific region.

From a macro perspective, the AIIB is not only conducive to economic growth in Asia, but also brings pragmatic interests to European economies. It is really not necessary for the US to take the AIIB as an imaginary economy challenging the World Bank. In fact, the AIIB can make up the insufficiency of the World Bank and Asian Development Bank, to perfect the existing international financial order, instead of replacing them.

The BFA’s theme “Asia’s New Future: Towards a Community of Common Destiny” indicates the future direction of Asia. Although the management rules of the AIIB has yet to formulate, its members should have a consensus of establishing a fair, open and inclusive financing platform. In addition to abandoning geopolitical disputes, major powers must also eliminate the gaming attitude to give fresh impetus to regional infrastructure and economic development in Asia. — Sin Chew Daily

* This is the personal opinion of the writer or organisation and does not necessarily represent the views of Malay Mail Online.