The AIIB Will Help Bridge Infrastructure Finance Gap

The China-led Asian Infrastructure Investment Bank (AIIB) will serve to ease the looming liquidity drought in infrastructure financing. As the World Bank and the Asian Development Bank move toward concessional lending and knowledge sharing with low-income countries, the AIIB is left with an important niche to fill.

Developing necessary infrastructure is a vital strategy if we are to realize global growth potential. From the early 2000s up to 2030, the world will have to invest US$ 57-67 trillion in infrastructure, such as roads, ports, power plants and water facilities. Infrastructure finance requirements in emerging market economies (EMEs) account for 37 percent of this value. But Otaviano Canuto of the World Bank argues that this share should be considered a lower bound. The figure does not include "development goals" and EMEs would need an additional US$ 1 trillion per year until 2020 just to keep pace with the demands of urbanization, growth, climate change and global integration.