BEIJING: The China-backed Asian Infrastructure Investment Bank (AIIB) on Thursday announced the opening of its first office outside its Beijing headquarter, in what appears to be an effort to negotiate China’s Covid-19-related policies including restrictions on international travel and strict quarantine requirements for returnees.
The new “interim” office will be in Abu Dhabi, one of the multilateral bank’s founding members, an AIIB release said on Thursday.
The West Asian emirate was chosen as the location keeping in mind its connectivity with many of the 105 members of the bank, which was formally established in 2015 and became operational the following year.
“The AIIB Board of Directors has approved the establishment of an Interim Operational Hub (the Hub), the bank’s first overseas office,” the multilateral lender said in a statement on Thursday.
“The preferred location for the hub will be Abu Dhabi in the United Arab Emirates (UAE), pending formal agreement to be finalised during the coming weeks,” the statement said, adding the “hub” location best fits the bank’s selection criteria, “…in particular superb connectivity to the bank’s global membership”.
The bank’s statement did not link the opening of the new office to Covid-related restrictions in China but tied it to the bank’s “rapid growth”, saying the expansion of bank members was “…the catalyst for opening an office that helps bring the bank both closer to its clients and to the front lines of its business”.
{{/usCountry}}The bank’s statement did not link the opening of the new office to Covid-related restrictions in China but tied it to the bank’s “rapid growth”, saying the expansion of bank members was “…the catalyst for opening an office that helps bring the bank both closer to its clients and to the front lines of its business”.
{{/usCountry}}“The hub also provides proximity to global financial centres and connectivity with the international infrastructure ecosystem which is important to maintaining AIIB’s commercial momentum,” the statement said.
Given that the bank now has a portfolio of 181 projects in 33 member countries valued at $35.7 billion, China’s strict zero-Covid policy, marked by lockdowns, mass testing and strict quarantine policies would have likely hampered that “commercial momentum”, especially the monitoring of ongoing projects.
AIIB officials maintain that the bank follows strict protocols and good practices during the implementation of projects it funds, and doing so remotely - in the backdrop of travel restrictions - might not always be adequate and efficient.
For AIIB officials, every site visit abroad would mean weeks-long quarantine requirements on return to China.
“The hub will provide AIIB with a robust platform to enable effective supervision of its growing investment portfolio, strengthen its project monitoring and implementation services across the globe,” the statement said.
The opening of the Abu Dhabi office could just be the beginning, the statement indicated.
The hub has been designated as an ”interim” operation for the purposes of gaining experience prior to establishing AIIB’s long-term global presence, the bank statement said.
Informed by this experience, the bank will seek board authorisation for opening additional offices to better serve growing roster of clients and expanding stakeholder communities.”
India, the second largest shareholder in AIIB after China, has emerged as the bank’s largest borrower since 2016, bagging some 34 projects valued at over $8.7 billion until now.