China led 21 Asian nations, including India, in forming a multilateral financial front in the form of the Asian Infrastructure Investment Bank (AIIB), being seen as a challenger to the U.S.-backed Bretton Woods institutions.
India signed a memorandum of understanding, along with Pakistan, Sri Lanka, Bangladesh and Nepal and others, as the founding member of the AIIB on 24th October.
Usha Titus, Joint Secretary, Economic Affairs division of the Finance Ministry, signed the MoU on India’s behalf. With an initial subscribed capital of $50 billion, the setting up of the Beijing-headquartered AIIB has been welcomed by the World Bank and the Asian Development Bank.
The 21-nation group comprises Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.
The World Bank's capital is about $220 billion, while the Asian Development Bank has $175 billion capital.
Asia needs infrastructure development. The World Bank estimates that $8 trillion in spending is required between 2010 and 2020 just to keep Asian economies humming along. Only a tiny slice of that can now be provided by the Asian Development Bank and other institutional lenders, so the AIIB hopes to help fill some of those enormous gaps.
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