Interview: Indonesia scholar sees AIIB significant supplement to int'l financial institutions

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JAKARTA, Oct. 2 (Xinhua) -- The Asian Infrastructure Investment Bank (AIIB) is a significant supplement to the existing international financial institutions by providing loans for infrastructure construction to less developed countries to enhance national development, an Indonesian scholar said.

Bambang Suryono, president of the Jakarta-based think tank Nanyang ASEAN Foundation, told Xinhua recently that unlike traditional international financial institutions whose main purpose is to reduce poverty, AIIB focuses on the development of infrastructure.

"Due to the different positioning and business focus, AIIB and the existing multilateral development banks are complementary rather than competitive," he said.

Suryono, also chairman of the Asia Innovation Study Center in Indonesia, said the establishment of AIIB enhances the overall strength of multilateral development banks at a time when there is a huge demand for infrastructure financing in Asia, and will boost regional and even global economic development.

He also said AIIB's funds come from its various members, and AIIB pools together the funds to improve the usage efficiency. The AIIB loan will help reduce the development gap between countries in the region by "supporting the poor and weak through the rich and strong."

Talking about the relationship between Indonesia and AIIB, he said Indonesia is a founding member of AIIB and has played an important role in the establishment and operation of the bank.

Indonesia's Assistant Minister of Finance Suminto acts as a director from the constituency of Cambodia, Indonesia, Laos, Sri Lanka and Timor-Leste and is one of the 12 directors of AIIB.

Besides, Indonesian Deputy Coordinating Minister for Economic Affairs Luky Eko Wuryanto serves as AIIB's vice president and chief administration officer, and is one of the five vice presidents of AIIB.

At the same time, Suryono said Indonesia is also one of the biggest beneficiaries of AIIB since its establishment.

According to the official website of AIIB, as of the end of September 2020, AIIB has approved eight Indonesian loan projects covering slum upgrading, irrigation, infrastructure development in tourism area, communications and epidemic prevention among others, agreeing to provide about 2.2 billion U.S. dollars in loans to Indonesia.

The National Slum Upgrading Project is the first Indonesian project approved by AIIB in 2016. Suryono spoke highly of the project, saying that it will change the lives of 9.7 million people in Jakarta and 153 other cities by providing clean drinking water, sanitation, waste disposal and wastewater drainage systems, as well as better roads.

Suryono said AIIB's pragmatic and efficient professionalism in Indonesia's National Slum Upgrading Program has been welcomed by the Indonesian government and people.

"It is hoped that AIIB will extend this cooperation with Indonesia to other Asian countries and contribute more to poverty alleviation, environmental protection and infrastructure development around the world," He added.

The COVID-19 pandemic has affected many countries, including Indonesia. In June, three months after the outbreak of COVID-19 in Indonesia, AIIB approved two Indonesian projects totaling 1 billion U.S. dollars to provide financial support for prevention and impacts mitigation of COVID-19 as well as economic recovery.

Suryono said the two AIIB projects were timely. "The COVID-19 is continuing spreading in the country with a significant slowdown in economic activity and a decline in state revenues."

"The AIIB loan will help ease the impact of the epidemic on the real economy, especially on small and micro enterprises, and increase the confidence of Indonesians in fighting the epidemic and restoring the economy." Enditem

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