Bangladesh joins new Asian bank

The floating of Asian Infrastructure Investment Bank (AIIB) and Bangladesh's formal signing of the Memorandum of Understanding to become part of AIIB slated to start operations at the end of 2015 is welcome news. AIIB intends to play a key role in developing infrastructure in the Asian region. Although the World Bank opposed its formation, the Asian Development Bank (ADB) has termed AIIB's entry to cater for infrastructure funding needs in Asia as understandable.
Given Bangladesh's large financing needs spreading from communications to power, having access to another multilateral regional bank in parallel to an institution like ADB can only be advantageous. None need to be apprehensive about this new institution eventually competing with ADB, which in reality has little basis since ADB has been a tested friend of Bangladesh for decades. ADB has played a pivotal role in helping more than 1.2million people gain access to electricity through projects it helped finance and helped achieve significant improvements in transport, water and education.
For Bangladesh, the ushering in of AIIB opens up the possibility of yet another multilateral lending source after the World Bank and ADB. Getting access to loans for infrastructure is still some way off as the bank must first develop an effective oversight mechanism to ensure funds are properly utilised. AIIB, being a regional bank with an Asian focus should be a welcome addition to countries like Bangladesh seeking concessional loans to improve the state of its infrastructure.