Analysis of Asian Infrastructure Investment Bank

International organizations play a critical role in the improvement of economic development and growth of various regions in the world. In the course of conducting their operations, various organizations face some challenges that adversely affect their operations. Some of the prominent international institutions that have substantially contributed to the development of different regions include the IMF, World Bank and Asian Infrastructure Investment Bank (AIIB) among others. AIIB has its headquarters in Beijing and has expanded its operations to others nations in the Asian continent and the oceanic regions. The focus of this article is to analyze the AIIB which faces an international issue of difference in political ideologies of various nations in the world. Furthermore, AIIB faces an international issue of inconvertibility of the currency that China has proposed for its operations. Despite the various issues that affect AIIB, it has a prospect of an increase in the number of members. The major challenge which AIIB faces is the complexity of its principles.

AIIB Prospect

AIIB is an international organization that developed with a primary mission of providing financial support to nations in Asia to help develop infrastructural connectivity (Chow 1257). According to Shepard (1), AIIB is an institution that China established (in 2013) as a way of countering the challenges which result from the unfavorable policies by other institutions including World Bank and IMF. Chinese leaders influenced other states to join the AIIB hence improve the development statuses of various Asian nations as a measure to curb the US monopoly on the global financial operations. Studies show that one of the major issues that affect operations of AIIB is resistance from the major states such as US (Shepard 1). Notably, American leaders have openly opposed the establishment of AIIB due to the fear that the previously mentioned institution would adversely affect US dominance in international affairs. Apart from America's resistance to join, it has dissuaded a majority of its allies not join the AIIB hence causing significant challenge to the progress of the international organization above.

AIIB has a set of objectives which it intends to fill in the course of attaining its mission of providing an alternative economic support to the nations in Asian and Oceanic regions. First, AIIB intends to improve connectivity and promote sustainable economic developments within the Asian regions where it operates (Mackintosh 28). As a way of improving economic growth and development, AIIB focused on the building of infrastructure. Also, AIIB has the aim of improving international cooperation in issues that affect the development of various regions in different parts of the Asian content. Indeed, the focus on economic development through improvement of infrastructure has the opportunity of substantially enhancing the welfare of various personalities living in the region mentioned above. The financial aids that AIIB provides to its member states have immensely improved the relationships among nations from various states thus improving the funds that the institution above generates (Hubbartd117). However, in the course of providing financial assistance to other AIIB faces some challenges which adversely affect its operations.

As a global institution, the AIIB plays a crucial role of addressing various issues some of which involves infrastructure of nations that are within the Asian continent by providing capital assistance which aids in the improvement of the welfare of various personalities living in Asia. The infrastructural organization of AIIB significantly improves its abilities to enhance the economic development of states that are within the Asian continent. For instance, the organization mentioned above has a board of directors who promptly spearhead its operations. Consequently, the AIIB has managed to provide substantial support to the developing nations in the Asian continent and oceanic regions.

            AIIB has various members from different parts of the Asian content thus improving the organization's ability to generate adequate funds for executing its development agenda. Surveys that scholars have conducted indicates that by October, 2017, AIIB had a total of 80 members but the leaders of the organization postulated to number to increase by the end of 2017 because there were multiple nations that had expressed desires to join the international organization (Tadokoro, Susumu, " Kazuya 81). Notably, countries such as Cyprus, Bolivia, Chile, Greece, Samoa, and Romania were set to join AIIB once they deposited their first installment of capital with the institution. Analysists opine that an inclusion of the prospective nations mentioned above will significantly increase the bank's ability to efficiently rival other international financial organizations (Tadokoro, Susumu, " Kazuya 8181).  The analyses that scholars have conducted indicates that AIIB is expanding rapidly hence an implication that the organization will promptly meet its target concerning member states. Precisely, John (8) opines that AIIB started its operations with a relatively large capital and a total of 57 states which provided a proper basis for execution of the institution's plans.

Callaghan and Paul (125) opine that the inclusion of countries from the west immensely increases the commercial activities from which AIIB will gain considerably. For instance, a majority of European nations have joined the international institution above hence increasing the area within which it will operate. Besides, the increase in member states, AIIB has favorable opportunities for competing with organizations such as World Bank and IMF which often work through the ideologies that their organizers have established. As a way of increasing the membership of AIIB, China has changed its tact of focusing on the Asian neighbors and has made efforts of involving the European G7 members since the year 2014(Callaghan " Paul 126).

International issues

Scholars opine that one of the major challenges that adversely affects the operations of AIIB is the difference in political ideologies of nations in the world (Mackintosh 29). Indeed, the difference in political ideologies has significantly affected decisions by various nations to join the AIIB. Notably, countries such as the US have adamantly declined to join AIIB as a way of ensuring that the organization fails to achieve its objectives and properly compete with other international institutions. Apart from America's decision not to join the AIIB, it has made deliberate efforts to dissuade other countries (such as Japan) from joining the previously mentioned institution. Consequently, AIIB has substantially faced a challenge of low membership states. However, despite the adverse activities by the US, some of the developed nations such as Germany, France, and Britain (which are also America's close allies) have joined thus frustrating America's efforts to stifle the development of AIIB.

The second international issue that adversely affects operations of AIIB involves the convertibility of Renminbi (RMB), a currency that China intends to use for the organization's activities (John 9). Indeed, the currencies which international organizations use should be readily convertible into other monies; however, in the case of AIIB, the Renminbi is challenging to fully convert into other currencies thus deteriorating the efficiency with which the institution can conduct its activities. Besides, the complexity in the conversion of Renminbi critically impedes the ability of the institution above to quantify the contributions that its member states are remitting towards various development agendas that it has (Chow 1275). Therefore, the presence of international issues such as inconvertibility of Renminbi has adversely affected the operations of AIIB.

Challenge Faced by AIIB

The major challenge that significantly affects the success of AIIB is suspicions that a majority of people hold towards the organization. According to Beeson and Nick (80), AIIB has established a set of policies which aids in guiding its operations, but nations sense some deceit in the plans that China has (Shepard 1). Notably, most states feel that China has set the AIIB as a way of deviating from its bilateral deals whereby Chinese government would provide substantial loans to its allies. Besides, Chinese focus on infrastructure alone does not provide adequate ground to convince other nations about the perceived developments that will result from engaging in activities of AIIB. Consequently, the inability of other nations to comprehend policies that AIIB has significantly reduces the institution's successful operation.


As evident in this essay, AIIB is an essential international organization which aims at improving infrastructural development in different countries in the Asian and Oceanic regions. The headquarters of AIIB is in Beijing, China but the institution has expanded its operations to include nations across the world. The institution above has the prospect of an increase in members. However, the major challenge that AIIB faces is lack of clarity in its principles. The major international issues in the operations of AIIB include inconvertibility of its currency and differences in political ideologies.

Works Cited

Beeson, Mark, and Nick Bisley. Issues in 21st Century World Politics., 2017. Internet resource

Callaghan, Mike, and Paul Hubbard. "The Asian infrastructure investment bank: Multilateralism           on the silk road." China Economic Journal 9.2 (2016): 116-139.

Chow, Daniel CK. "Why China Established the Asia Infrastructure Investment Bank." Vand. J.           Transnat'l L. 49 (2016): 1255.

John, Wong. Zhu Rongji and China's Economic Take-off: World Scientific, 2016. Print

Mackintosh, P.M. Stuart. “The Creation of the Asian Infrastructure and Investment Bank: America’s Loss and China’s Gain.” World Economics Vol. 17 (3), 2016

Shepard, Wade. “The Real Role of The AIIB in China's New Silk Road.” Forbes. 2017 Jul. 15th.          Web. April 14, 2018

            < chinas-new-silk-road/#1e987b057472>

Tadokoro, Masayuki, Susumu Egashira, and Kazuya Yamamoto. Emerging Risks in a World of          Heterogeneity: Interactions Among Countries with Different Sizes, Polities and Societies.            , 2018. Internet resource.

Deadline is approaching?

Wait no more. Let us write you an essay from scratch

Receive Paper In 3 Hours
Calculate the Price
275 words
First order 15%
Total Price:
$38.07 $38.07
Calculating ellipsis
Hire an expert
This discount is valid only for orders of new customer and with the total more than 25$
This sample could have been used by your fellow student... Get your own unique essay on any topic and submit it by the deadline.

Find Out the Cost of Your Paper

Get Price