The milestone came with the approval of another $285m worth of lending announced yesterday, with both Bangladesh and Indonesia set to benefit.
China opened the bank with hopes of wresting some soft power away from the west, and namely the US. The news highlights how, as America retreats from its role in financial and development assistance under the Trump administration, China is increasingly able to step into this space.
Yesterday’s loans are “different in their focus, but united in their efforts to leverage infrastructure spending to stimulate growth and improve the quality of life for local communities”, explained Gujarat D.J. Pandian, vice president and chief investment officer at the AIIB.
“We value the ongoing collaboration with our multilateral development bank partners to be able to bring this much-needed financing to Indonesia and Bangladesh.”
The AIIB partners with institutions like the World Bank in order to deliver its financing, including the two loans announced today.
Meanwhile, US president Donald Trump has proposed a $650m cut to US funds for the World Bank and other international development finance institutions over the next three years.
This would not endanger the US’s status as a top donor. Nevertheless, as the country rolls back funds, it also reduces its influence, just as China steps up its own.
Earlier this month, the AIIB took on 17 new members, including the world’s tenth largest economy – Canada.
Its expansion also included Belgium, Hungary, Ethiopia, Hong Kong, Venezuela, Peru and Afghanistan. Total membership now stands at 70 countries, including many of the world’s most influential economies.
The US had attempted to prevent support for the AIIB growing, but was snubbed by long-time allies who chose to join anyway.
Jin Liqun, president of the AIIB, said the global interest in joining the bank affirms the rapid progress that has been made in establishing it as an international institution.
“I am very proud that AIIB now has members from almost every continent, and we consider further applications... later this year,” he added.
When the bank launched in 2016, it did so with 57 signatories mostly hailing from Asia and western Europe, limiting the bank’s global reach as it could only embark on projects in its member countries.
Last week’s expansion will see the bank able to cultivate greater presence in South America and Africa also.
However the new additions, as well as some original signatories, will first need to fulfil a number of requirements before their membership can be confirmed. These include undergoing the needed domestic processes and depositing their first instalment of capital with the bank.
Brazil, South Africa, Kuwait and Spain missed a deadline to do this by the end of last year, however all have been granted an extension by the AIIB.
