Lessons for the AIIB
Discussion about China’s establishment of the Asian Infrastructure Investment Bank has focused on questions about the AIIB’s governance and standards. This risks eclipsing a far more important discussion about the role that multilateral investment institutions play in supporting economic growth in emerging markets.
FREETOWN – China’s decision to establish the Asian Infrastructure Investment Bank has sparked a lively debate among governments, global finance experts, and development specialists. Unfortunately, while there is considerable support for the AIIB’s mission, much of the attention has been focused on questions about its governance and standards. This risks eclipsing a far more important discussion of the role that multilateral investment institutions play in supporting economic growth in emerging markets and the challenges they face achieving this goal.
The mandates of individual development banks vary. The AIIB, for instance, will focus solely on infrastructure. The African Development Bank (AfDB), the presidency of which I am currently seeking, has a far more expansive mandate. But all of these institutions share an overarching goal: to lift people out of poverty and foster sustainable development.
Leaders of these organizations must make complicated choices in allocating their finite resources. For example, they must balance the battle against poverty and hunger against efforts to improve gender equality, increase access to education, or tackle corruption. Having served as Sierra Leone’s finance minister, central bank governor, and now foreign minister, I have worked for many years with international organizations to manage these competing priorities as I oversaw the economic revitalization of my own post-conflict state.