4:53 pm - Thursday May 24, 9979

Dhaka to pay $ 400m for ‘sizable’ AIIB stake    

Bangladesh is ready to pay US$400 million to subscribe a significant stake in the China-mooted Asian Infrastructure Investment Bank (AIIB) in view of its position in global and regional atmosphere of present times, officials said, reports the Financial Express (FE).

“Our government’s decision is subscribe as much stake as available since our economy is growing and to have more voice on the bank board,” additional secretary of Economic Relations Division (ERD) Asif-uz-Zaman told the FE Tuesday.

china BDHe said if subscribing shares is fixed based on gross domestic product (GDP) of member-countries, Bangladesh will have to pay $150 million.

“But if the size of population is also considered alongside GDP, Bangladesh will get shares worth $400 million.”

Mr Zaman said the steering committee of the AIIB is exploring the both options of subscription. “We have calculated the amount of shares will be available in proportion to the size of GDP of participating countries as well as GDP and size of population.”

China has assured offering increased volume of shares to Bangladesh since many of the participating countries may not be able to subscribe their due shares. “In that case we will try to buy shares of those countries who fail to pay fee.”

Asked if Bangladesh has the capacity of paying $400 million to buy AIIB stake, Mr Zaman said since the payment period for the least-developed counties will be 10 years, Dhaka will not face any difficulty.

“We have completed our homework already based on the article of agreement of the bank,” he added.

Another ERD official said while calculating subscription of shares the steering committee has taken into consideration the socioeconomic progress of the country, Bangladesh’s target to graduate into middle-income nation by 2021, export growth, and the size of foreign-exchange reserve.

The emerging bank, aimed at financing key infrastructure projects in Asia, will have a $100-billion authorised capital of which $80 billion will be callable capital. Of the authorised capital, 75 per cent is set for regional members and the rest 25 per cent for non-regional members.

Until now, 22 countries have joined hands in establishing the bank. Recently, New Zealand also agreed to participate in the bank while Australia and South Korea are also weighing the option.

On October 24, Bangladesh and 21 other Asian nations signed an intergovernmental Memorandum of Understanding (MoU) in Beijing to establish the bank, considered a new rival of the West-dominated multilateral lenders, including the World Bank.

Terming joining in the AIIB a good decision, Mr Zaman said the bank will make funds available for infrastructural development which Bangladesh seriously needed.

He said the AIIB has some clear differences with the World Bank and the Asian Development Bank. One shareholding country will have one vote—none will have veto power, and no country will be able to have influence on decision making like the other multilateral lenders.

The World Bank in a report last April said Bangladesh would need $7.4 billion to $10 billion a year until 2020 to develop infrastructure up to the standard for serving its growing population.

In total, it also predicted, the country will require between $74 billion and $100 billion between 2011 and 2020 or 7.38 per cent to 10.02 per cent of its gross domestic product to improve infrastructure.

Presently, Bangladesh is receiving only $4.0 billion in credits a year from the multilateral lenders.