Minister praises China's vision over AIIB

Pakistani Minister of Finance and Revenue Mohammad Ishaq Dar lauded a China-led funding initiative as "historic", as Beijing gathered together 20 regional members to build a bank to fund infrastructure projects in Asia.

The minister is on a two-day visit to Beijing for the Friday signing ceremony of a memorandum of understanding leading to the establishment of the Asian Infrastructure Investment Bank.

In an interview with China Daily, Dar said China's leadership "has shown great vision and farsightedness" in leading this initiative of enhancing regional connectivity, and Beijing looks set to "get smaller and medium-sized nations in Asia to sign on to a bank where these nations would get equal treatment".

Pakistani Minister of Finance and Revenue Mohammad Ishaq Dar, file photo.

The planned multilateral development bank intends to fund projects and thus address infrastructure deficit. One of the missions the minister has undertaken in his China trip is to lobby Chinese financial institutions to deal with the thirst for funding.

During a meeting with his Chinese counterpart Lou Jiwei in Beijing, on Thursday, he urged more investment in the Diamer Bhasha dam, which will create a 39.6 billion-cubic-meter reservoir and the capacity to produce 4500 MW of electricity.

In Dar's eyes, "underdeveloped infrastructure" is the major challenge that overshadows most emerging Asian countries because most projects "have been funded by governments or domestic banks".

"Multilateral institutions, such as the World Bank and the Asian Development Bank, mostly focus on projects aimed at poverty reduction rather than on infrastructure development. Foreign investors also were mostly not present," Dar said.

But the AIIB is not a threat to the World Bank and the ADB because it "will target an area that has not been a high priority for the other multilateral development institutions", the minister said in response to some criticisms of the AIIB.

"The Asian countries, too, have the right to develop their own infrastructure in accordance with their own priorities, and the AIIB is an effort in that direction", he said.

Looking back at the past 10 months of multilateral financial authorities' talks and the deliberations over a memorandum of understanding regarding the bank, Dar said he was impressed that "China has taken every one along in the finalization of the MOU and at no point did any participating member feel their suggestions were not accepted".

"China has also shown steadfastness in adhering to the time frame that it had announced a year ago, "he said.

Regarding Pakistan's vision and plans about the bank, Dar said since Pakistan is a founding member of the AIIB, Islamabad expects this bank "to be inclusive in development, transparent in its business" and to become "a game changer for Asia and the rest of the world".

Founding members including Pakistan have supported the view that AIIB "should be open for membership to all interested Asian countries"，the minister said.

"We believe that Bank will constitute an important platform to convert the abundant savings available in the region into investment to help regional economies in sustainable and rapid development, and to contribute to the world economy," Dar said.

In Asia, around US$ 8 trillion will be committed to infrastructure projects over the next decade, and Dar believes that AIIB will provide China a greater and important role over infrastructure development in various Asian countries. "Such an institution shall be effective in enhancing goodwill for China," he said.

Pakistan is sparing no effort in boosting infrastructure construction and tackling energy supply in order to revitalize its economy.

The two countries share common ground. Last year, China proposed two strategic initiatives — the New Silk Road Economic Belt and the 21st Century Maritime Silk Road, for which Pakistan has voiced strong support.

The major bilateral initiative of the China-Pakistan Economic Corridor, like the Silk Road initiatives, will benefit from the AIIB since the AIIB will mainly focus on infrastructure construction, Dar said.

He noted that the Silk Road projects are "instrumental in laying the foundation for regional cooperation" and, for countries along the road, "international trade is the only option to sustain economic growth and development".

Dar also emphasized the need by both China and Pakistan to review the existing double taxation avoidance agreement to which both parties agree.

"It is our belief that Pakistan can act as a force multiplier for China and we will continue to work toward this end," he added.

Zhang Yunbi zhangyunbi@chinadaily.com.cn