The G20 Summit beginning in Hangzhou on Sunday is a platform where world leaders should discuss the role Multilateral Development Banks can play in bridging infrastructure gap and generating balanced growth, a top official of the China-led Asian Infrastructure Investment Bank (AIIB) has said.
A month ago, in the run-up to the summit, the Chinese government called a meeting of all major MDBs such as the AIIB and the New Development Bank (NDB) of the Brics to discuss the road ahead.
India is one of the founding members of AIIB, which was launched in April 2015 and now has 57 members. A broad consensus emerged after the meeting of MDBs in Beijing.
“Asian banks have to work together and find a way so that growth can be generated. It has to be generated across the globe. I think the G20 has to discuss it (growth) and it is here that MDBs like the AIIB can play a vital role in fulfilling the vision and bridging the gap,” DJ Pandian, AIIB’s vice-president and chief investment officer, told Hindustan Times in Beijing.
The focus of this year’s G20 Summit is growth, Pandian said.
“Worldwide, growth hasn’t been as expected in the last seven to eight years. How to put growth as the main agenda for the world economy is the focus (at the G20). This is where AIIB has a big role,” said Pandian, a former chief secretary of Gujarat.
Big infrastructure projects usually cost more than $1 billion to $1.5 billion and private banks or even individual MDBs might not have the capacity to fund such projects, he said.
It is here that the G20 can streamline cooperation between different entities by setting an agenda and readying a framework for growth.
“We need to come together. The collaboration between various banks will be discussed whether it is AIIB or NDB. It is the time for collaboration and cooperation…it is time for leveraging advantages,” Pandian said.
It is also important to launch mega projects to trigger growth, he added.
Elaborating on projects the AIIB is looking at, Pandian said: “We are looking at roads, highways, high-speed rail networks, dedicated freight corridors and development of ports. These are the major infrastructure projects which can take two to three years to complete and require capital upfront.”
India is looking at AIIB to partially meet its huge demand for infrastructure.
“India has a huge unmet demand for investment in infrastructure and is preparing a basket of projects worth $2-3 billion for AIIB funding in urban development (including smart cities), energy, urban transport, railways, inland waterways and water supply,” an Indian embassy statement had said during finance minister Arun Jaitley’s visit to China in June.