AIIB turns 10: Is there trouble ahead for the China-backed bank?

Ten years ago, Beijing launched the Asian Infrastructure Investment Bank with a bold promise: To be faster, leaner, and more efficient than the lumbering multilateral development banks that have long dominated global finance. Today, AIIB is a $100 billion institution with more than 100 members. It has lived up to its promise of efficiency — but its lean oversight structure has raised some eyebrows about whether the institution is putting enough resources toward accountability.

Other organizations are concerned about the bank’s lack of a robust mechanism to hear complaints. AIIB has a project-affected people’s mechanism, or PPM, where groups impacted by AIIB’s projects can file grievances and seek accountability. But civil society organizations said that AIIB pushes them to go first to the subcontract level with their complaint before the institution will get involved, according to Radhika Goyal, a policy associate at the Accountability Counsel, an organization that advocates for communities impacted by internationally financed projects. And often, she said, the project-level grievance mechanisms don’t exist or don’t function well.

“When communities come to us, they’re saying that the projects need to be significantly redesigned, paused, or completely stopped. But even the most effective project-level [the grievance redress mechanism] cannot consider this,” Goyal told Devex.

When the issue is brought to the bank, Goyal said it recognizes the problem but responds to this by saying that it needs to respect the sovereignty of the borrowing countries and allow them to address the concerns.

Read the full article from Devex here.