Tonga has joined the Asian Infrastructure Investment Bank (AIIB), becoming its 84th Member at Official Flag raising Ceremony held at the AIIB headquarter in Beijing on 5 February.
The AIIB, a multilateral development bank focused on developing Asia, with members from all over the world, began operations in 2016. Mr. Jin Liqun, the President of the AIIB; Vice Presidents Right Hon. Sir Danny Alexander and D. J. Pandian, and Senior Officials of the AIIB attended the flag raising ceremony.
Tonga’s Ambassador to the People’s Republic of China, H.E. Tau’aika ‘Uta’atu said he was deeply honoured to witness the flag ceremony “to mark the official accession of the Kingdom of Tonga as the 84th member of AIIB.”
AIIB President Jin Liqun said that AIIB looked forward to forging closer working relationship with Tonga in the areas of climate change and renewable energy, and other areas.
The AIIB’s Board of Governors includes a governor and an alternate governor, who are appointed by each member country of the bank.
The AIIB has appointed Tonga’s Minister of Finance, Hon. Tevita Lavemaau as the Governor, representing Tonga to the AIIB, and the Ministry of Finance CEO Ms Belwyn Fa’otusia as the Alternate Governor.
AIIB began operations with 57 founding Members (37 regional and 20 non-regional). According to the AIIB website, by the end of 2020, it had 103 approved Members representing approximately 79 percent of the global population and 65 percent of global GDP. In the South Pacific, early joiners were Australia, New Zealand and Samoa (2015), followed by Vanuatu (2016), Fiji (2017) Cook Islands (2020) and Tonga (2021).
Regional Financing Tool led by China
The AIIB was established in 2016 with $100 billion capital. It was created with the purpose of serving as a regional financing tool for Chinese President Xi Jinping’s “One Belt, One Road” initiative. It is part of President Xi’s overall economic policies, which include the establishment of multiple trading and financial ventures led by China.
Potential Rival to World Bank
It is viewed as an eventual potential rival to the World Bank, which China’s leadership views as being too much under the influence of the United States.
The World Bank currently holds approximately two-thirds of the capital of the Asian Development Bank. The Asian Development Bank was established in 1966 and now has 68 members, and 49 are from the Pacific. Tonga became a member of the ADB in 1972.