Indonesia's Finance Minister has defended the structure of the new Asian Infrastructure Investment Bank (AIIB), saying that the China-backed institution would ensure projects it funded were high quality and delivered with appropriate governance.
Speaking to CNBC, Bambang Brodjonegoro said the AIIB was adhering to the best practices as followed at its international counterparts such as the World Bank and the Asian Development Bank.
"Indonesia has been involved in the discussion regarding the establishment and governance of AIIB. So far, we are satisfied because experiences from the World Bank and ADB have been used fully in the discussion. In fact, we're trying to improve what have been doing well, both in the World Bank and ADB, in order to make the AIIB better," Brodjonegoro told CNBC on Tuesday.
The remarks come after 50 founding members of the AIIB on Monday signed the articles of agreement outlining how the new international bank would be run. Indonesia is one of the countries who took part in the signing ceremony in Beijing, alongside the U.K, Germany, Australia and South Korea.
The $50 billion AIIB, which aims to support infrastructure development in lower- and middle-income Asian countries, has been viewed by some as a rival to the Western-dominated World Bank and ADB. The U.S. and Japan have notably declined to join the China-led economic outreach project, citing concerns over debt sustainability, environmental protection and governance.
There are also worries that Beijing could use the AIIB to push its own geopolitical and economic interests as a rising power, considering that voting rights are determined by gross domestic product (GDP) and capital contribution, which will give the world's second-largest economy an outsized say in the multilateral financial institution.
According to the Articles of Agreement, "regional countries" such as Asia and the Middle East region will shoulder 75 percent of the total capital base while "non-regional countries" such as European nations will contribute the remaining 25 percent.
Reuters reported that China will hold a 30.34 percent stake in the AIIB, rendering it the largest shareholder, and that Beijing will have 26 percent of the voting rights. India is the second-biggest shareholder with an 8.4 percent stake, while Russia is third with a 6.5 percent stake.