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.
Our first efforts focused on developing the “software” of post-conflict development: basic education and health-care facilities, accountable economic and political governance, and the creation of new social safety nets. We subsequently shifted our focus to the “hardware” of economic development, intensifying work on the construction of roads and energy facilities and creating incentives for foreign direct investment in mining, fishing, agribusiness, and real-estate development. While recognizing that every country is different, the practices we adopted, the successes we had, and the lessons we learned have a broader relevance.