No Competition between ADB and OBOR-AIIB: ADB Chief

At the 50th Annual Meeting of ADB, President Takehiko Nakao while addressing opening Press Conference stated that “It's a good idea to connect countries and to promote activities in this region; we can cooperate because we have similar ideas,” The comments were made in response to the queries regarding the rising Chinese influence in the region.

The statement was made in line with policymakers’ attempts to crush the view that Japan and China were competing for investment in the region. BOJ Governor, Kuroda, who led the ADB before Nakao has time and again hinted at more cooperation between ADB and OBOR-AIIB, citing the need for more supporters to fund the growing infrastructure needs.

This year Asian-Pacific region has a record investment by ADB in various developmental projects. The ADB and OBOR-AIIB see each other as two organizations achieving the same objective, many efforts have been carried out to co-operate on instances where interests are similar. Cooperation on high level has been pushed by many policy makers and leaders. These efforts have led to co-financing of operations between AIIB and ADB, out of which two were carried out last year and one in 2017.

However, the view of competition is not without evidence. The competition between the banks has trickled down into financing Pakistan’s projects. With Pakistan only recently rejecting ADB’ offers for part financing Karachi-Peshawar Railway Line (ML-1). Citing Chinese reluctance behind the refusal, Pakistan’s Minister for Planning and Development, Ahsan Iqbal in an official statement said “China strongly argued that two-sourced financing would create problems and the project would suffer,”.

The rising influence fueled by Chinese investment in region is growing with every project’s approval; it is yet to see whether Chinese led OBOR-AIIB can maintain its financing monopoly.