AIIB chairman urges private sector not to worry over sovereign risks in Belt and Road investments
Faced with mounting questions from business leaders on the economic viability of the proposed investment ideas under China’s One Belt One Road vision, the chairman of the Asian Infrastructure Investment Bank (AIIB) Jin Liqun reached out publicly on Tuesday and sought to reassure private sector business leaders on their concerns over sovereign risks in the destination countries.
Jin reassurances have come as a wide spectrum of private sector players, including former Hong Kong financial secretary Anthony Leung, who is now a chairman of the private sector developer Nan Fung Group, have increasingly stepped up and said the high degree of sovereign risk presented by the 60-plus countries along the Belt and Road region is a key deterrent to investing in the projects.
Leung has urged Chinese government-backed financing bodies that are experienced in doing business in the high risk countries to step in and help resolve the investment gridlock. One idea he has pitched is to have the Export Import Bank of China step in and provide a new form of dedicated insurance to remove or lessen the sovereign risks that private investors face.
But Jin told audiences and panel members at the Boao Forum for Asia Financial Cooperation on Tuesday not to worry too much about these issues.
“Sovereign risk is not a big issue,” said Jin. “I’m not worried about the sovereign risks – as long as the project is good for that [recipient] country.”
He told private sector players to turn their focus to the standalone project-level economic benefits and their chances of them being executed, as well as whether the infrastructure projects could bring synergy to the given markets they are in.
