As the Asian Infrastructure Investment Bank (AIIB) and New Development Bank (NDB) mark their tenth anniversaries, it is worth asking what difference these institutions have made.
Following their launch, many observers touted the transformative potential of both institutions. In 2016, Nobel Prize-winning economist Joseph Stiglitz argued that the NDB ‘reflects a fundamental change in global economic and political power’. Daniel C K Chow claimed ‘the rise of the AIIB could be the first indication that China will succeed in its quest to displace the United States as the final arbiter of the rules of international trade and finance in the twenty-first century’.
A decade in, these claims are belied by a more prosaic reality. While the AIIB and NDB have some distinctive features, both fit comfortably within the existing family of multilateral development banks (MDBs), largely mirroring and complementing their predecessors. While each bank has grown and matured, neither has lived up to the promise cited by their supporters or the peril predicted by their critics.
There are commonalities in the structure and evolution of the two banks. Both focus on infrastructure development, with a growing emphasis on green investment, though the strength of their green credentials has been questioned. Both have expanded their membership since inception: from 57 to 111 countries for the AIIB and from 5 to 14 for the NDB. Both have also matured institutionally through leadership transitions, the opening of new offices and expansion beyond sovereign lending into loan guarantees, equity investments and private-sector financing.
