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Teddy Ng

China will hold the biggest share of voting rights in the Asian Infrastructure Investment Bank, or AIIB, but Beijing will be cautious before exercising any power of veto, according to Indonesia's envoy to Beijing.
Soegeng Rahardjo said the newly formed international development bank had been well set up to ensure voting rights were used positively, and he believed the power of veto was unlikely to be used.
"We should learn from the successes and failures of the International Monetary Fund and the World Bank. This is a good teacher for the AIIB to move forward," he said.
"What is more important, I think, is how we use the voting rights … rather than talking about how to divide the voting rights.
"Many countries will react negatively [if the power of veto is exercised easily]."
Indonesia would get about 3.1 per cent of the voting rights and Asian members 75 per cent in total based on the size of their economy and their contribution to the bank, Rahardjo said.
A quarter of the rights would go to members from outside Asia, and China would have de facto veto power because it would hold the biggest block of votes, Rahardjo added, without giving a precise figure.
"Other countries will have a significant say in the operation of the bank," Rahardjo said. "I don't think there will be the situation of the majority dominating the minority, or minority domination of the majority."
Rahardjo's remarks came after the AIIB's 57 founding members met in Singapore last month to discuss goals for running the bank.
The lender's founding charter is due to be signed in Beijing on Monday.
The AIIB was established under China's "One Belt, One Road" initiative, which is aimed at bolstering trade and infrastructure links in Asia and beyond.
Beijing has pledged to streamline the bank's governance and avoid what it claims are the inefficient practices of lenders dominated by the West.
The United States, in particular, has publicly expressed concern over how the AIIB will be run and how open and transparent its decisions will be.
Rahardjo said the bank should be governed not only by market principles and profit considerations, but also by the potential impact of the proposed projects on local residents and whether local governments provided political guarantees for the infrastructure.
Local construction companies should be allowed to take part in the projects through open bidding, and the schemes should benefit local communities, he added.
Indonesia plans to upgrade its sea ports, airports, highways and railways in the coming years, and is ready to submit proposals to the AIIB once it starts operations. "I think all infrastructure is related to connectivity. It is important for the AIIB to participate in our infrastructure projects," he said.
Indonesian President Joko Widodo has suggested that a regional office of the bank could be set up in Jakarta, serving the Association of Southeast Asian Nations.
"It is logical that the AIIB has a representative office in Jakarta. This is the role that Indonesia would like to play, especially in subregional financing arrangements," Rahardjo said.


China unlikely to wield veto power in new Asian bank, Indonesian envoy says

Indonesian ambassador Soegeng Rahardjo says 75 per cent of the AIIB's voting rights will go to Asian members. Photo: Simon Song 

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Jakarta's ambassador says Beijing wary of brandishing de facto power to block decisions


China unlikely to wield veto power in new Asian bank, Indonesian envoy says

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Jakarta's ambassador says Beijing wary of brandishing de facto power to block decisions

Jakarta's ambassador says Beijing wary of brandishing de facto power to block decisions