The Asian Infrastructure Investment Bank said Thursday it has suspended all operations with Russia and Belarus, a rare example of a Beijing-based multilateral lender, citing geopolitical factors in its decisions.
The loan pause seems to reflect AIIB’s assertion as a multilateral institution with a global shareholder base rather than a statement condemning the war. The Chinese government has established the bank as an alternative to Western-backed multilateral lenders such as the International Monetary Fund and the World Bank. China holds about 27% of the vote in the bank, which has a Chinese president.
The World Bank has also suspended programs in Russia and Belarus. China’s top banking regulator said this week that China would not join Western sanctions against Russia.
The six-year-old AIIB said it would “protect the AIIB’s financial integrity amid the evolving economic and financial situation”, according to a statement on the bank’s website.
The bank has approved two projects in Russia worth a total of $ 800 million, out of a total of 168 approved AIIB projects worth nearly $ 34 billion, according to disclosures of investment projects on the bank’s website. Two projects have been proposed for Belarus.
Russia plays an important role in the management of the bank. It holds 6% of the right to vote, the third largest stakeholder after China and India. As one of the bank’s 57 founding members, Russia holds a seat on the bank’s board of directors.
One of the bank’s five vice presidents is Russia’s Konstantin Limitovsky, one of the two vice presidents responsible for bank lending. Efforts to reach Mr Limitowski were unsuccessful.
Scott Morris, a Washington-based senior fellow at the Center for Global Development and an AIIB adviser, said Thursday that the decision “reflects the multilateral nature of the institution”, including the significant voice of members of the North Atlantic Treaty. According to Mr Morris, NATO members collectively give 23% of the bank’s voting rights. The United States and Canada are not members of the AIIB; nor Japan.
Jin Likun, the founder of the AIIB and a former financial policymaker in the Chinese government, has often spoken out about the bank’s multilateral ownership and has repeatedly rejected any proposals from the bank’s Beijing headquarters to link it to Chinese political policy.
“We are working under the direction of the board. China is only one member, “Jin told The Wall Street Journal in 2020. The United States and Japan refused to join the bank when it was founded, fearing it would undermine Western-run institutions such as the World Bank. bank.
The AIIB said in a statement Thursday that it was ready to expand funding for members affected by the war.