Kiwi expat Andrew Cross is the chief financial officer of the Asian Infrastructure Investment Bank (AIIB).
Kiwi expat Andrew Cross is the chief financial officer of the Asian Infrastructure Investment Bank (AIIB).
A Kiwi at the top of a Beijing-based bank, collectively owned by more than 100 countries including New Zealand, denies it is financing infrastructure globally as a means to buy influence.
The remarks followed allegations from a former employee that the Asian Infrastructure Investment Bank (AIIB) is dominated by ChineseCommunist Party interests.
“It’s an institution that makes decisions based on consensus,” AIIB chief financial officer and Whangarei Boys’ High School alumni Andrew Cross told the Herald when he was in Auckland on Saturday.
“The offsetting shareholders essentially mean that the institution has to go forward altogether.”
This year Canada reportedly cut its ties with the bank after a Canadian citizen resigned as the bank’s director general of communications, alleging undue influence internally.
The Treasury told the Herald it was not reviewing its membership in the bank following Canada’s move.
New Zealand has 0.4 per cent of total voting power as a result of a US$259.2 million contribution to the bank — we signed up to it when it was founded in 2016 by former finance minister Sir Bill English.
India is the second-largest owner with 7.5 per cent of voting power, followed by Russia with almost 6 per cent.
When asked directly about Beijing seemingly buying soft power in member countries, Cross stressed its member oversight structure and AAA rating by three ratings agencies.
“We’re a publicly funded institution. You have to turn up every day and justify that public licence to operate.
“It’s been a pretty good success.”
In its seven years of operation, the AIIB had spent US$45 billion financing 234 projects, he said.
This year it had financed Bangladesh and the Philippines’ economic recovery from the pandemic, solar and gas turbine power plants in Uzbekistan, cargo ships to transport goods between China and India, and roads in Bangladesh and India.
China owns 26 per cent of the Beijing bank’s shares and voting power. Photo / Getty Images
It also funded expansions of India’s Chennai metro rail system, Turkey’s Antalya airport and China’s Yunnan Kunming Changshui airport.
It had issued bonds in New Zealand, but had not financed any physical projects here.
“All of these countries will benefit, of course, by infrastructure and whoever finances that,” Cross said.
He quoted an estimated US$5 trillion infrastructure deficit in the Asia-Pacific region the bank was aiming to fill that was worsened by climate change and the economic impact of the Covid-19 pandemic.
“If economies suffer, if there’s challenges, I would expect the bank would be stepping up and doing more. In the same way that we will have put something like close to US$14 billion to work during Covid.”
Some of that helped countries buy vaccines, he said.
Money was lent to the private sector and governments in its member countries at 3-7 per cent on fixed or floating terms up to 25 years, Cross said.
Details of its deals showed public-private partnerships were common.
“We have to act as a catalyst for the private sector to be able to get in. One of our reasons for existing is, how do you make the environment positive for infrastructure investing?”
The AIIB’s membership was divided into 12 constituencies.
New Zealand was grouped with Australia, Vietnam, Singapore and Cook Islands. Next year New Zealand would lead the group’s representation at the bank.
“New Zealand has an opportunity to use its voice to be very clear and loud around what makes sense for the Pacific and how the climate is impacting the Pacific,” Cross said.
“There’s a very low level of awareness amongst New Zealand taxpayers that they own, what I think, is a pretty phenomenal development institution.”
Madison Reidy is the host of New Zealand’s only financial markets show, Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
