State Minister for Finance and Planning MA Mannan has expected that the big contributors won’t control the policy of the proposed Asian Infrastructure Investment Bank (AIIB) like other global lenders – World Bank and International Monetary Fund.
He expressed his optimism while talking to the Dhaka Tribune yesterday just before his departure for China where he is scheduled to sign the China-initiated AIIB deal tomorrow as a founding member of the bank.
Criticising one of the global lender, Mannan said, “The management of that particular multilateral bank always appoints managing directors from a certain country. I hope that it won’t be repeated in case of AIIB.”
He also hoped that MD of AIIB must be appointed through consultation with the member countries.
Bangladesh would have to initially pay US$132.1m to get the membership of the proposed AIIB and the government will have to pay $660.5m in five equal installments over the next five years, the state minister told the Dhaka Tribune.
The minister said: “The proposed China-initiated global bank, which started its journey in 2013, will only finance the Asia’s enormous infrastructure need and Bangladesh will be benefited from that financial institution.’’
Though the newly floated AIIB will give loans in big infrastructure projects such as roads, railways and power, it won’t provide any loans in sectors like education and health, he added.
Australia and other European countries can become the founding member of the bank but they won’t get any infrastructure loan from AIIB. They will only get dividend from their investment in AIIB, clarified the state minister.
According to an official of Economic Relation Division, the AIIB will have 57 members, and the representatives of whom will convene in China later this month to sign the agreement that will make the multilateral development bank official.
He further said the bank is set to kickoff off in January next and the terms and conditions of its loans would be similar to those of the Asian Development Bank.
The ADB gives two types of loans-one which carries an interest rate of 2.5% and another linked to London Interbank Offered Rate, which is normally within the range between 4.5% to 5%.
The rate of interest on credit from the global lender WB is 0.75% and is repayable in 40 years after a ten-year grace period. In other words, the receiving country gets 50 years to repay the loan.