Representatives of 57 prospective founding countries of the Asian Infrastructure Investment Bank (AIIB) will meet in Beijing next Monday to sign the constitution of the bank, creating a legal framework for the existence of the entity.
"This will be a significant event. The constitution will lay a solid foundation for the establishment and operation of the AIIB," said Chinese Finance Minister Lou Jiwei.
All parties have agreed on the AIIB's objectives, membership, stakes, voting power, operations, governance and decision-making mechanism. Prospective members hammered out the constitution in Singapore last month. When signed, the document will be subject to legal and parliamentary ratification in all member countries before it becomes active.
"The signing of the constitution means that preparations are almost complete," said Liu Dongmin of the Chinese Academy of Social Sciences.
"If everything goes to plan, the AIIB will start operation by the end of 2015," said Chen Fengying, a researcher with the China Institute of Contemporary International Relations.
The AIIB will have three tiers of governance: a board of governors, a board of directors and executives. The governors have the supreme power in the bank. The directors, who are non-standing, convene to make decisions. Executives will take care of routine work.
"Some international organizations have too much bureaucracy. The AIIB has a streamline structure that might increase efficiency," said Tang Min, member of a government think tank who previously worked for the Asian Development Bank.
The AIIB will recruit personnel in a transparent and open manner and be zero tolerant of graft or fraud. Members will contribute to the lender largely according to GDP and enjoy a voting power accordingly. Details will probably become available on Monday.
China first proposed the AIIB in 2014 with the aim of financing infrastructure. Many countries do not have the capacity to fund the infrastructure upgrades they need. So far, 57 countries have agreed to join the AIIB.
All parties are working closely on a list of investment projects and trying to make the first AIIB investment "a very successful one", according to the Chinese finance minister.
"The AIIB will be headquartered in Beijing. As the host country, China will provide reliable and strong support," said Lou.
