New MDBs Step onto the Stage

Abstract

AbstractIn 2016, two new multilateral development banks were launched: the Asian Infrastructure Development Bank (AIIB) and the New Development Bank (NDB). By the end of 2020, AIIB and NDB were both well on their way to establishing themselves as major new players in global development finance, with a substantial shareholder capital, a rapidly growing staff, and over US$20 billion in approved loans each. AIIB and NDB’s founders looked closely at existing MDBs, and have replicated many aspects of their organizational design, governance structures, and financial and operational policies. By following this basic model, AIIB and NDB are facing the same tensions and trade-offs faced by the other MDBs discussed in this book so far. These are playing out in unique ways, however, due to the context in which they were founded and the constellation of countries making up their membership, and in particular the role of China. This chapter explores how governance dynamics and financial realities have play out over the first five years of AIIB and NDB. The chapter begins with a brief review of the background of and motivations for the creation of AIIB and NDB, before moving on to their governance, operations, environmental and social safeguards, and financial performance.