The Asian Infrastructure Investment Bank (AIIB) faced a seminal moment on Monday as founder members signed a charter that paves the way for the bank's operation later this year.
The orderly formation of the new multilateral institution, which began as a vision first raised by Chinese President Xi Jinping in October 2013, clearly illustrates Asia's great need to improve its underdeveloped infrastructure as well as the common aspiration of its countries to explore further growth potential in the region.
Meanwhile, as the increasing importance of emerging markets changes the landscape of a global economic order that has long been dominated by advanced economies, they also want a new institution that best serves their own interests. The AIIB answers that call.
With a principal mission to fund infrastructure projects, the bank will help meet the massive capital requirements of infrastructure projects worth trillions of dollars in the Asia-Pacific. No single institution could do this on its own.
As a newcomer, the AIIB should be viewed as positive competition rather than blunt rivalry for existing multilateral institutions such as the World Bank and the Asian Development Bank (ADB), which are increasingly accused of providing limited help in developing countries.
China, the AIIB's largest shareholder with a 30.34-percent stake, has repeatedly said the new bank will complement the current international economic order and enable itself to take more global responsibility.
For its part, the AIIB prefers partnerships to a zero-sum game. Indeed, one of its major principles is to forge closer working relationships with other multilateral and bilateral development institutions, and to promote regional cooperative partnerships so as to cope with common challenges.
Leaders of the IMF, World Bank and other leading global lenders have on many occasions expressed willingness to collaborate with the new bank to fill Asia's infrastructure gap.
World Bank Group President Jim Yong Kim said on Monday that the World Bank views the AIIB as an important new partner with which it will jointly address the huge infrastructure needs critical to ending poverty, reducing inequalities and spreading shared prosperity.
There have been doubts over the competence and transparency of the new bank's governance.
Doubts on novelty are surely understandable, but not always justifiable. The "highest standards" touted by institutions serving developed economies may not be appropriate and reasonable in all cases.
The new bank strives to follow international rules in its operation, policymaking and management to ensure efficiency and transparency.
For sure, it will draw upon the good practices of existing multilateral institutions, but not copy them all. For example, in order to improve efficiency and avoid bureaucracy, the bank's board of directors will be nonresident, unlike with the World Bank or the ADB.
The signing ceremony on Monday showcased the concerted efforts and inclusive spirit among the founding members, and foretold the advent of a great institutional contributor to regional and global economic development.
