The high standards of the Asian Infrastructure Investment Bank (AIIB) are “good for multi-laterals image,” said President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti, applauding China’s engagement with the multilateral system.
The China initiated AIIB is a “real model of applying the highest environmental and social and other governance standards,” Chakrabarti said in a recent interview.
The high standards of the AIIB, he said, are also good for China’s image. Launched in October 2014, the Beijing-based AIIB is a multilateral development bank that aims to support infrastructure in the Asia-Pacific region.
The EBRD and the AIIB set up a joint unit in Beijing about two years ago, which has been “very successful” in trying to bring the two organisations together, according to Chakrabarti.
The joint unit has also promoted exchanges between the EBRD and Chinese companies, banks, think tanks, research institutes, the Chinese government, and others, he said.
Speaking of Belt & Road Initiative, the EBRD president said he thinks it can make a major contribution to tackling some global development challenges and promoting multilateralism as long as projects meet good standards and avoid high debt.
Chakrabarti said he looks forward to his bank working with the Chinese government, the Chinese private sector and others to ensure the initiative “works well”
China’s long-term policy decision to join all multilateral platforms it can and exchange ideas and practices with global institutions have been “a good thing,” said the president of the London-based multilateral lender.
China’s engagement with the multilaterals has shown that the country wants to play a part in global governance, and it also wants to draw inspiration from different multilateral organisations, Chakrabarti said.
Since joining the EBRD in early 2016, China has “really strengthened” its relationship with the bank, and the relationship has been “really important” to the bank, said the bank president. “I think on all the fronts we’ve made progress,” he said.
“It’s not just Chinese banks and Chinese investors, companies who are now investing in EBRD projects,” said the bank president. “We have a lot more in the pipeline.”
“I think also our work with Chinese think tanks, Chinese research institutes, (and) the Chinese government on various policy ideas has really increased,” Chakrabarti said.
Looking ahead, the EBRD president said he thinks continuity and upgrade will characterise the next stage of the bank’s relationship with China.
“I would like to see more co-financing with Chinese banks and Chinese corporates. I would like China also to discuss more with the EBRD some ideas about certain countries,” especially countries where the EBRD has invested heavily, such as Turkey, Egypt, Ukraine and Greece, he said.
Noting that he encourages China’s private sector to invest more in other countries, Chakrabarti said he wants to see Chinese companies in not just Central Asia, but also in Eastern Europe, North Africa and the Middle East.
While acknowledging that multilateralism is “under strain,” the EBRD president said he is still optimistic about the future of multilateralism, because progress on climate change and inequality, among other issues, “would not have been possible” if it was not for the work of the multilaterals.
Nearly half of the EBRD’s lending so far this year has been in the green economy area, Chakrabarti said, adding that he expects to see future growth in investments in renewables and energy efficiency.
“I think that’s an area where actually the multilaterals can play a very strong part,” he said.