The Asian Infrastructure Investment Bank (AIIB) will abide by its mandate as an apolitical multilateral lender and not get involved in political disputes even as multilateralism is heavily tested, its chairman, Jin Liqun, said Friday.
The lender will not be “disoriented” by geopolitical crises, he told Reuters on the margins of the Boao Forum in southern China’s Hainan province, whether that’s the war in Ukraine or disagreements between the United States and China over debt restructuring in developing markets like Sri Lanka.
“The more multilateralism comes under pressure, the more we have to work together to protect it, “said Jin, who added that the bank”must overcome all this headwind to continue supporting its customers in accordance with the basic mandate of this institution.”
Development finance has become the latest fault line between Washington and Beijing.
Washington has accused the world’s largest bilateral lender of “lingering” in debt relief talks for cash-strapped countries like Sri Lanka and Zambia, while Beijing believes multilateral lenders like the International Monetary Fund (IMF) should also take losses.
The AIIB is ” obliged “to provide assistance to its members, such as Sri Lanka, which is trying to get loans from the IMF to clean up its bilateral debts, Jin said,”especially when they are in need”.
“But on the other hand, we have to protect the bank in terms of its creditworthiness,” he added. “We must protect our Triple A rating so that our financing costs do not rise so much that other borrowers suffer.”
By november, according to S&P Global Ratings, the AIIB had funded 194 projects totaling $ 37 billion, up from $ 29 billion in October 2021.
The banking sector was a hot topic on the forum following the collapse of Silicon Valley Bank and the bailout of Credit Suisse, and AIIB chief economist Erik Berglof said the bank “cannot be assured that there will be no new candidates for instability” when asked about the AIIB’s exposure to the economic situation in Switzerland, one of its member states.
However, the president remains optimistic, both about European financial markets and the AIIB.
“We are developing and we are strong,” he said, when asked if progress had been made on expanding the bank’s programs in Sub-Saharan Africa, Latin America and eastern Europe.
“We now have projects in Rwanda, Ecuador, we have projects in central and Eastern European countries,” he said.