Research On The Loan Conditionality Of Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank(hereinafter referred to as the AIIB)is an emerging international aid platform under the contemporary international financial system.Its influence on the development of the world economy cannot be ignored.This influence is concentrated in the practice of loans conditionality.The AIIB's legal framework for loans draws on and adopts the advanced experience and models of the existing multilateral development banking system.The reference to experience must be accompanied by the innovation of rules and systems.The AIIB Articles of Agreement stipulates that the AIIB loan business does not attach political conditions.The basic principle of “non-politicization”helps to establish and develop multilateral development financing new form.At the same time,the AIIB Environmental and Social Policy regards fulfilling international environmental protection obligations as a condition for obtaining loan assistance from developing member countries,but the main business areas of AIIB are in developing countries,some of which are The setting does not focus on the particularities of its financing area and financing targets.In addition,the AIIB Policy on Prohibited Practices prevents the borrower from committing a breach of contract in the future through the deterrence effect of the law.However,the policy only implements the basic provisions of the prohibition conditions in the content arrangement,and it is not enough to prevent problems and risks that may arise in the future project loan practice.In order to prevent the AIIB from institutional risks of loan conditionality,we extend our vision to other multilateral financial institutions to seek experience that can be learned.The International Monetary Fund(hereinafter referred to as IMF)did not consider the special circumstances faced by member states when specifying the specific content of loan conditionality.The additional political loan conditionality caused violations of the economic sovereignty of member states.The Asian Development Bank(hereinafter referred to as ADB)maintains some of the most powerful safeguards of all multilateral banks in the environmental standards of project loans.This mature and well-functioning operating mechanism of ADB has achieved good results in loan practice and can serve as the best international practice for AIIB compliance.The World Bank has extensive experience in sanctioning project borrowers for defaults.It not only sets strict standards to regulate prohibited activities in participating projects,but also joins other multilateral development banks in joint sanctions against dishonest borrowers.In practice,the World Bank has continuously revised and integrated the prohibition policy,which has formed a good operating standard.For example,setting cross-prohibition conditionality and recovery conditionality to strengthen the constraining force of loan conditions to the borrowing country,and promote their participation in the good operation and construction of the project.The AIIB loan conditionality legal system should be based on the actual situation of the development of the AIIB,draw on the experience and lessons of other multilateral financial institutions,and establish,sort out and improve the loan mechanism in line with the AIIB's own goals and characteristics.Specifically,first of all,to avoid the mistakes of the IMF in the policy loans introduced in the future.This requires the AIIB to focus on the flexibility of the policy loan conditionality,balance the conditionality of the loan and the actual situation of the borrowing country,while maintaining the transparency of its loan decision-making procedures and accepting extensive supervision by the international community.Secondly,in the setting of environmental standards,follow the best international practice of ADB,establish and improve the pre-project environmental assessment and reporting,information disclosure system.Finally,in the setting of the prohibition conditionality,the binding conditionality of the borrowing countries and the recovery conditionality of the loans are strengthened to strengthen the constraining force of the borrowing country,thereby achieving the sustainable development of the project and ensuring the financial and profitability of the bank.