Ideas to Action:

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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

Parting Words: Stephen Groff on His Tenure at the Asian Development Bank

With Jim Kim’s abrupt departure from the World Bank, there has been a swirl of commentary on questions of legacy, the best of which aim to answer the question, “how is the bank doing?” For large multilateral institutions like the World Bank, that’s a frustratingly difficult question to answer. Seemingly objective measures like volume of financing or sectoral targets are simplistic and bring their own value judgements about what the institution should be doing. Annual reports give us a narrative about institutional performance, but a heavily biased one.

Map of countries involved in China's Belt and Road Initiative coded by their risk of debt distress

Will China's Belt and Road Initiative Push Vulnerable Countries into a Debt Crisis?

In a new CGD paper, we assess the likelihood of debt problems in the 68 countries we identify as potential BRI borrowers. The big takeaway: BRI is unlikely to cause a systemic debt problem, yet the initiative will likely run into instances of debt problems among select participating countries—requiring better standards and improved debt practices from China.

AIIB Has Another Opportunity to Establish Best MDB Practice

In advance of adopting a new Policy on Public Information, the AIIB is inviting suggestions on how it could best align public disclosure with its guiding principles of “promoting transparency, enhancing accountability and protecting confidentiality.” The adoption of the new policy provides AIIB President Jin Liqun and the AIIB shareholders an opportunity to demonstrate that this newest of multilateral development banks (MDBs) is serious about its commitment to adopting international best practices. I identified a number of actions that the AIIB could take to improve its disclosure practices. Here are my top three recommendations:

When China Looks at MDBs, It Sees Infrastructure

When the Chinese government launched a new multilateral development bank (MDB) with “infrastructure” in the name—the Asian Infrastructure Investment Bank (AIIB)—it hardly seemed far-fetched to assume a strong Chinese preference for infrastructure-related MDB financing. Everything we know about China’s bilateral development financing suggests the same. Yet, a closer look at the AIIB’s charter suggests openness to a broader range of sectors and activities, pointing to potential for investments in “other productive sectors.”