AIIB 2019: Intensified Corporatization of Development and Dirtier Energy

Posted on 12 July 2019

Photos: AIIB, Pixabay

From the beginning, it is no secret that the Asian Infrastructure Investment Bank (AIIB) forms part of China’s strategy to strengthen its influence in the region, both financially and geopolitically. It is holding its first annual meeting outside of Asia, in Luxembourg on July 12 to 13, 2019. As its membership and project portfolio continue to grow, social movements have raised the alarm on the AIIB ushering in an expanded era of corporatization of development and environmental unsustainability.


The AIIB is a multilateral bank that is focused on financing infrastructure and related projects in Asia and, to a limited extent for now, in other parts of the globe. It was initiated by China and began operating in January 2016. It is headquartered in Beijing and China is the biggest shareholder. AIIB has now 97 approved members worldwide including 18 European countries and Canada, while the US and Japan have not expressed their intentions to become members.

The AIIB has labeled itself as “clean, lean and green” to describe its commitment to transparency, sustainability and efficiency (as opposed to the supposed bureaucracy of the Asian Development Bank or ADB). Its strategy is along the themes of sustainable infrastructure, cross-border connectivity and private capital mobilization with focus on energy, transport and sustainable cities. It has a co-financing framework agreement with the World Bank and other multilateral banks situating it firmly within existing international finance frameworks. Thus, rather than a threat, the AIIB complements established international financial institutions and their neoliberal agenda.

The 2019 Annual Meeting in Luxembourg will focus on the role of cooperation and strategic investments in strengthening connectivity in order to contribute to deeper integration and economic growth. It is a bit symbolic as Luxembourg was the first European country that signed up for the AIIB. But Luxembourg’s importance is also due to the country’s reputation as an international finance hub that hosts the biggest Renminbi clearing hub in Europe. Some 29% of global investment funds investing in China are Luxembourg-domiciled funds, according to Luxembourg’s financial agency.

Corporatizing Development?

The AIIB has declared itself as a mobilizer of private capital “to bridge the financing gap” for infrastructure. A key narrative is leveraging private investment for “bankable” infrastructure projects. At the beginning of 2019, it announced a USD 500 million fund for promoting green and sustainable investments in emerging Asian markets as an effort to woo private corporations.

This emphasis on bankability is, according to the UN Conference on Trade and Development (UNCTAD), contradictory to the experience of other countries before that used infrastructure development to advance industrialization. The AIIB extols the concept and practice that infrastructure projects are first and foremost profit-making ventures rather than endeavors to deliver important services or usher in national development especially for poor member countries.

China’s cash, belt and road?

The connection between China’s crown jewel program – the Belt and Road Initiative (BRI) – and the AIIB is not surprising. The BRI is an important way of China’s assertion of its global economic clout. The BRI’s components are: 1) Belt –