ISLAMABAD - Minister for Finance Senator Mohammad Ishaq Dar has said that Asian Infrastructure Investment Bank (AIIB) would provide financing support to developing countries in Asia including Pakistan for infrastructure development to promote regional connectivity.

“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,” he told leading Chinese media during his visit to(Beijing including Global Times, China Daily and Chinese Central Television after the decision of the establishment of AIIB in Beijing the other day.

In his interview with Global Times, he said that he had attended the ministerial meeting of the prospective founding members of Asian Infrastructure Investment Bank (AIIB) after the signing of the MoU for the establishment of AIIB. 

The ministerial meeting, he said discussed setting up of the Multilateral Interim Secretariat which will carry out the work on the Articles of Agreement of the proposed Bank.  “We also discussed the roadmap so that this work is completed by the end of 2015 and the Bank is up and running by the beginning of 2016”, he remarked.

The AIIB, he said was a landmark decision and will provide financing support to developing countries in Asia for infrastructure development in order to promote regional connectivity. 

“Pakistan has been supporting the initiative right from the initial announcement. We believe that the Bank will be an important platform to convert the abundant savings available in the region into investment to help regional economies achieve sustainable and rapid development thereby contributing to the world economy”, he remarked.

When asked how does he evaluate the role that the AIIB would play in the development of Asia and how Pakistan would benefit from the bank,  Ishaq Dar said that  the bank would help meet Asia’s financing needs for infrastructure development and regional connectivity.  “As China eases restrictions on inflows and outflows of capital and the RMB becomes convertible, the bank could be important for tapping China’s excess savings and putting them to good use in developing other parts of Asia”, he said.

Mr. Dar said the Bank would complement the efforts of the existing multilateral development banks (MDBs) rather than compete.  He added it would cooperate because, for many large projects, co-financing makes sense.  However, the Bank, he said would aim to be leaner and faster than the existing institutions, and that is the kind of healthy competition that it would give to the other MDBs.

He said in our country, the need for developing new infrastructure is immense.

However, he said existing resources do not allow us to meet many of these needs. We are happy that the Bank would provide financing support for meeting infrastructure deficits in Pakistan and help improve its connectivity within the region.

To another question what role does China have in the Asian Infrastructure Bank in his opinion?

Senator Ishaq Dar said that China is now the second largest economy in the world.

“We continue to hear that 21st century is Asia’s century. However this can only happen if Asia, which has all other fundamentals right, can supplement these fundamentals with meeting the infrastructural deficits”, he remarked.

China’s leadership, he said has shown great vision and farsightedness in assuming the role of leading this initiative.

“China supports the existing international economic architecture while evolving its governance. There is no doubt that it will play a lead role in the working of the Bank, not only through the provision of finance but also in identifying and prioritizing infralopment projects throughout the region”, he remarked. Replying to another question, he said that China and USA are political and economic heavyweights in the world.

“I would not like to see it in a negative way. The present day reality is that United States has an important role in the World Bank, the Asian Development Bank and other international financial institutions. And establishment of AIIB will give leverage to China. But these are all “ifs” and we could only get to know the real outcome of this effort when things, which are fluid at the moment, eventually firm up”, he maintained.

In his interview with CHINA DAILY, Ishaq Dar said the basic idea underlying the AIIB was clear to harness the region’s vast financial resources and development expertise acquired in recent decades to improve regional connectivity and infrastructure.

In this connection, he said China surely has a huge role to play.  “Let me also say that0we continue to hear that 21st century is Asia’s century. However, this is only possible if Asia, which has all other fundamentals right, can supplement these fundamentals with meeting the infrastructural deficits. China’s leadership has shown great vision and farsightedness in assuming the role of leading this initiative”, he remarked.

Dar said “We expect that the Bank will provide financing support to developing countries in Asia for infrastructure development to promote regional connectivity.

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.

AIIB would provide financing support for meeting infrastructure needs of the Asian countries including Pakistan”.

Finance Minister Ishaq Dar said “We as founding members have supported the view that the Bank should be open for membership to all interested Asian countries. I also expect it to co-operate with other sources of funding-notably the Asian Development Bank (ADB), of which China is a member itself. Pakistan appreciates this initiative.

I can say one thing with full conviction that, whatever initiative China takes, there is a lot of wisdom in it”.

He said that as in the past, “we would continue to fully participate in the growth and development of AIIB”.  Pakistan, he said is a founding member of AIIB and it affords it ample opportunity to participate in decision making.

“We would like this Bank to be inclusive in development, transparent in its business and a game changer for Continent Asia and the rest of the world”, he remarked.

To a question, he said “We believe that this financing initiative 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”.

This, he said is important since the region needs to benefit from China’s exemplary growth and development in the last three decades.

“I must also say that we are very impressed in the way China has taken every one along in the finalization of the MOU and at no point any participating member has felt that their suggestion was not accepted. China has also shown steadfastness in adhering to the timeframe that it had announced a year ago at the APEC Summit meeting for the establishment of this Bank.

It is the resolve which has brought us closer to realizing a common dream of the Asian countries”, he remarked.

Replying to another question, he said that despite economic advancement, most emerging Asian countries, including China, India, ASEAN and South Asia region continue to suffer from underdeveloped infrastructure.    

Across the Asian region as a whole, it has been estimated that around US$ 8 trillion will be committed to infrastructure projects over the next decade to remedy historical underinvestment and accommodate the explosion in demand. Traditionally, he said most Asian infrastructure projects have been funded by governments or domestic banks.

Multilateral institutions like the World Bank and the Asian Development Bank mostly focus on projects aiming at poverty reduction rather than on infrastructure development.

Foreign investors, he said also were mostly not present.  In addition, many of them faced severe restrictions, including complex regulatory and legal regimes, uneven workforce quality, and occasional political interference.

“Now with the likely emergence of this Bank, which would be largely devoted to infrastructure development, I think it would be easy for the developing Asian economies to seek appropriate funding”, he remarked. Ishaq Dar said that the Silk Road Economic Belt and the China-Pakistan Economic Corridor are interlinked and reinforce each other.

“I understand that Chinese President Xi Jinping proposed the idea of building a Silk Road Economic Belt to link up Central Asia, South Asia and the Middle East countries located along the ancient Silk Road”, he said adding that “We are happy that China is seeking to enhance communication and road connectivity in the whole region which dovetails well with our idea of regional connectivity.

Pakistan and China should make sure the projects identified under the two ideas reknforce each other and are implemented expeditiously”.

He said that China backs India and Pakistan becoming members of the Shanghai Cooperation Organization (SCO) as the group has agreed to expand its membership.

China believes that this move would promote further development of the SCO and strengthen its efforts to safeguard regional security and boost regional development.

 India and Pakistan have actively participated in cooperation under the SCO framework and made positive contributions to the organization’s development. We0shall keep up the spirit in future.

 “We are now completing the procedural formalities and hope to become full members soon”, he remarked.

Replying to another question, he said first and foremost Pakistan has borne the brunt of over decade long war on terror, suffered physically and financially for the cause of peace not only in the region but the world as a whole.

“I won’t repeat the statistics for you all know very well how much we have lost, both in men and property. The losses literally run into billions of dollars” he remarked. Pakistan, he said has unswerving commitment towards regional peace and stability and it desires long-lasting peace in the region, which is essential for the socio-economic betterment of people.  Pakistan, he said is keen to promote its friendly relations with the neighbouring countries and seeks greater linkages and mutual interaction= especially economic and trade relations for the mutual benefit of the people of region.

Pakistan, he said has always stood for Afghan- owned and Afghan-led solution of the issues in Afghanistan and is committed to support Afghan brethren towards their efforts for peace, stability and development.

Dar said that Pakistan is looking forward to working with tle new Afghan government, but any bilateral or regional arrangement must address Pakistan’s concerns and interests.

“Pakistan seeks to promote friendly relations with India and wants peaceful resolution of all outstanding issues, including the issue of Kashmir in accordance with relevant UN resolutions and the will of the Kashmiri people. The present democratic government has made serious efforts to maintain dialogue process with India.

 It has made efforts to meet the challenge of extremism and militancy. We wanted to resolve the issue of militancy through a sustained dialogue process but, seeing no hope, we are now undertaking full military action to end the scourge of militancy. We had to face displacement of thousands of people from their abodes in North Waziristan at huge cost” he remarked.

Regarding challenges facing by the government, he said “I think militancy is the biggest challenge for our government and we are dealing with this issue as appropriately as we can.

Immediately after assuming responsibilities, Prime Minister Nawaz Sharif convened an All-Parties Conference on how to confront the militants and extremists with one voice and unity. We think if we can ensure domestic peace and security, economic boom would be a sure thing”.

“On the economic side, energy woes have bothered us from day one. Energy shortage affects the industry, the commerce and all day to day activities. So we are concentrating on this sector with great zeal, coming up with numerous power projects”, he remarked.

“Let me inform you that destite these and other challenges (like recent floods and IDPs issue), all international ratiog agencies have now accorded us positive ratings; we have regained the confidence of the international financial institutions that are ready to fund projects in Pakistan. Revenue collection, foreign remittances are on the up, forex reserves are also improving”, he remarked.

“We expect the international community to back Pakistan as we continue our quest for economic development. China has been very forthcoming, being ready to help us at all times. We are grateful as ever”, he concluded.