Asian Infrastructure Investment Bank, opens to lay down milestone for global economic governance

  Xi pushes for 'perfection of the system


BEIJING: China has pledged US$50mil (RM221.25mil) to the Asian Infrastructure Investment Bank (AIIB) to support infrastructure projects in less developed countries.

Launching the China-led bank here yesterday, Chinese President Xi Jinping said this proved China’s willingness to shoulder more international responsibility and “push for the perfection of the international system”.

“This is a historic moment,” he added.

With an authorised capital of US$100bil, AIIB was proposed as a global multilateral financial institution by Xi in 2013 to finance infrastructure development in Asia, including energy/power, transportation/telecommunications, rural infrastructure/agriculture development, and water supply/sanitation.

Representatives from 57 founding members, including Malaysia, attended the ceremony at the Diaoyutai State Guesthouse.

Malaysia, which holds 0.11% share and 0.36% of voting share in AIIB, was represented by Treasury deputy secretary-general Datuk Mohd Isa Hussain.

The three largest shareholders of AIIB are China, India and Russia, with a 30.34%, 8.52% and 6.66% stake respectively.

Each allocation is based on the size of the member country’s economy.

The bank, based here, is largely seen as a rival to the US-led World Bank and Interna­tional Monetary Fund.

The United States and Japan have shunned the AIIB while US allies – including Britain, France and Germany – have signed up as founding members.

AIIB president Jin Liqun promised to run AIIB as an organisation that is “lean, clean and green”.

“The bank will make a positive and significant difference in Asian development,” he said.

Speaking on behalf of the non-regional founding members, Luxembourg Finance Minister Pierre Gramegna said the fact that the idea to form AIIB came from the east was a testament to the rebalancing of the world’s economy.

“Without basic infrastructure, markets cannot function well and growth is limited. AIIB will be a boost to the Asian economy, and become a platform for cooperation that will foster economic integration and inter-regional connectivity,” he said.

By Tho Xin Yi The Star/Asia News Network

AIIB opens to lay down milestone for global economic governance

BEIJING, Jan. 16, 2016 (Xinhua) -- Chinese PresidentXi Jinpingaddresses the opening ceremony of the Asian Infrastructure Investment Bank (AIIB) in Beijing, capital of China, Jan. 16, 2016. (Xinhua/Li Xueren)

BEIJING, Jan. 16 (Xinhua) -- The Asian Infrastructure Investment Bank (AIIB), a China-initiated multilateral bank, started operational on Saturday, marking a milestone in the reform of global economic governance system.

Representatives of the 57 founding countries gathered in Beijing for the AIIB opening ceremony in Diaoyutai State Guesthouse. Chinese President Xi Jinping made a speech.

With joint efforts of all the members, the AIIB will become "a professional, efficient and clean development bank for the 21st century" and "a new platform to help foster a community of shared future for mankind, to make new contribution to prosperity of Asia and beyond and lend new strength to improvement of global economic governance," Xi said.

During the ceremony, Chinese Finance Minister Lou Jiwei was announced to be elected as the first chairman of the AIIB board of governors. Jin Liqun was elected the first AIIB president.

In addition to subscribing capital according to plan, China vowed to contribute 50 million U.S. dollars to the project preparation special fund to be established soon, to support the preparation for infrastructure development projects in less developed member states.

The AIIB will promote infrastructure related investment and financing for the benefit of all sides, Xi said, keeping Asia's enormous infrastructure development demand in mind.

Calling the initiative to establish the AIIB "a constructive move," Xi said it will enable China "to undertake more international obligations, promote improvement of the current international economic system and provide more international public goods."

Statistics from the Asian Development Bank (ADB) show that between 2010 and 2020, around eight trillion U.S. dollars in investment will be needed in the Asia-Pacific region to improve infrastructure.

Xi expected the China-initiated institution and other existing multilateral development banks to complement each other for mutual strength and cooperate on joint financing, knowledge sharing and capacity building.

In his address at the founding conference of the AIIB council on Saturday afternoon, Chinese Premier Li Keqiang said the operation of the new multinational development bank is "of positive and constructive significance for the global economic governance reform."

Hailing Asia "an engine" for the global economic growth, Li said the sustainable development of the Asian economy and regional economic integration rely on the infrastructure construction and connectivity, which would help facilitate the flow of trade, investment, personnel and information.

The aim of China initiating the AIIB is to widen financing channels, expand general needs and improve supply so as to bring along the common development in the region and promote world economic recovery with its own achievements, he said.

The premier called on the AIIB to integrate the China-proposed Belt and Road initiative with each country's development strategies, promote international cooperation on production capacity and innovate more modes to realize a diverse and inclusive cooperation.

Global leaders extended congratulations to the opening of the multilateral development bank.

"The ADB will cooperate closely with AIIB in supporting the development of the Asia Pacific region," said ADB President Takehiko Nakao in a congratulatory message to the opening of the AIIB.

"We will cooperate closely to provide support and constructive suggestions for the AIIB development," said Yoo Il-ho, deputy prime minister of the Republic of Korea at the opening ceremony.

China's Vice Finance Minister Shi Yaobin said in an interview with Xinhua that China does not intend to apply for financial support from AIIB in the initial stage.

"Though as the biggest shareholder of AIIB and the biggest developing country in the world, China is fully qualified to gain loans from the AIIB, but we made the decision mainly because that many other countries in the region are in more urgent need for infrastructure development," said Shi.

Shi said China holds 30.34 percent of the whole capital stock, with the first batch of capital stock worth 1.19 billion U.S. dollars already in place.

The AIIB was proposed by President Xi Jinping in October 2013. Two years later, the bank was formally established as the Articles of Agreement took effect on Dec. 25 last year.

As its name suggests, the AIIB will finance construction of infrastructures -- airports, mobile phone towers, railways and roads -- in Asia.

Amid the evolving trend of the global economic landscape, Xi expected the AIIB will help make the global economic governance system more just, equitable and effective. - Xinhuanet

Related:

AIIB will be a clean, lean and green bank, says first president

The Asian Infrastructure Investment Bank will be a 21st-century multilateral lender with rigorous corporate culture, says Jin Liqun.

 

Backgrounder: The AIIB

Full text of Chinese President Xi Jinping's address at AIIB inauguration ceremony

Spotlight: AIIB to promote vitality in regional development, opportunities for emerging economies 

BEIJING, Jan. 16 (Xinhua) -- The newly-inaugurated Asian Infrastructure Investment Bank (AIIB) will bring vitality to regional growth and opportunities for global development, especially for developing economies, overseas experts and scholars have observed.

Chinese President Xi Jinping on Saturday attended the opening ceremony for the international development bank in Beijing.Full Story

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School grades don't matter much?

Accounting firms PwC and EY start a trend in recruitment to help business and society

 

Big Four

WE all know that good grades in school won’t necessarily land you that first job. They do however go a long way towards convincing a potential employer that you’re likely to perform well if hired. That’s why you’re routinely asked to produce certificates and transcripts during the application process. How else can the employer get a quick reading on the discipline, intelligence, diligence and knowledge of a school-leaver or a fresh graduate?

But what if an employer decides that your grades shouldn’t matter as much? How will that change things?

For the answer to that, we ought to be watching the Big Four accounting firms in Britain.

Starting in June last year, PricewaterhouseCoopers (PwC) stopped using the UCAS tariff as an entry criterion for most of its undergraduate and graduate recruitment schemes. Developed by the Universities and Colleges Admissions Service, the tariff is the British system for allocating points to those seeking undergraduate placements.

The system applies to a long list of entry qualifications — for example, A levels, City & Guilds diplomas, and music examinations — and the points for each qualification are worked out based on the levels of achievement.

Before this, a person usually must have a minimum number of UCAS points before PwC would consider his job application, even if he’s a graduate. This is apparently a common practice in Britain. With the policy change, the accounting firm can now overlook mediocre A-level results if the candidate has gone on to soar in his degree programme.

PwC says the reduced emphasis on UCAS points is because it’s important to be a progressive and socially inclusive employer, and because it wants to reach the broadest range of talented students.

“There’s strong correlation that exists in Britain between social class and school academic performance. This data suggests that by placing too much emphasis on UCAS scores, employers could miss out on key talent from disadvantaged backgrounds, because they may perform less well at school. That’s why, from an academic perspective, we’re focusing on your degree,” it explains on its website.

And then in August, Ernst & Young (EY) announced that it would remove academic qualifications from the entry criteria for its 2016 graduate, undergraduate and school-leaver programmes. Instead of insisting on certain standards for UCAS points and degree classification, the firm relies on “a new and enhanced suite of online “strengths” assessments and numerical tests to assess the potential of applicants”.

In other words, EY recruits by evaluating the candidates’ strengths and promise, not just their past performance.

This decision came after talent management firm Capp had studied EY’s student selection process over 18 months. The analysis found that EY’s strengths-based approach in recruitment, introduced in 2008, is a robust and reliable indicator of a candidate’s potential to succeed in his role in EY.

“At EY, we are modernising the workplace, challenging traditional thinking and ways of doing things. Transforming our recruitment process will open up opportunities for talented individuals regardless of their background and provide greater access to the profession,” says Maggie Stilwell, the managing partner for talent.

“Academic qualifications will still be taken into account and indeed remain an important consideration when assessing candidates as a whole, but will no longer act as a barrier to getting a foot in the door.”

“Our own internal research of over 400 graduates found that screening students based on academic performance alone was too blunt an approach to recruitment. It found no evidence to conclude that previous success in higher education correlated with future success in subsequent professional qualifications undertaken.”

It’s interesting that Stillwell describes an overriding dependence on academic qualifications as a blunt approach. Stephen Isherwood, the chief executive of Britain’s Association of Graduate Recruiters, has a similar view. The PwC press release on the firm’s move to drop the UCAS points entry criteria, quotes Isherwood: “Using a candidate’s UCAS points to assess his potential is a blunt tool and a barrier to social mobility. This is an innovative step by one of the most significant graduate recruiters in Britain. Other graduate employers should follow its lead.”

PwC definitely sees itself as a trendsetter, saying its new recruitment assessment process could drive radical change across its industry. However, these radical changes haven’t happened yet. So far, Deloitte and KPMG, the other two firms in the Big Four, are still sticking to their minimum academic requirements in Britain.

It’s too soon to conclude that the recruitment changes by PwC and EY are a failed experiment.

The war for talent is intense among accounting firms. Businesses can’t stay at the top without thinking out of the box, taking bold steps, and being caring. It should be no different when it comes to how they hire people.

By Errol Oh Optimistically cautious viewpoint

Executive editor Errol Oh joined an accounting firm right out of school. That doesn’t happen in Malaysia anymore.

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Big Four Corporation

The Big Four are the four largest international professional services networks, offering audit, assurance, tax, consulting, advisory, actuarial, corporate finance, and legal services. Wikipedia

Internet set to cut cord with US government, ICANN urges Internet control

The US government, announcing its intention to end its role in March 2014, said it would seek to maintain a "multi-stakeholder" model for Internet governance

A plan to end a key US government oversight role on the Internet is on track for completion this year, the head of the online address gatekeeper said, in a symbolic move towards asserting the independence of the web.

While the transition will not change how the Internet works, it would help reassure users, businesses and governments about its integrity, according to Fadi Chehade, chief executive of the Internet Corporation for Assigned Names and Numbers (ICANN).

Chehade told AFP the transition plan being prepared since early 2014 will be delivered to the US government in February, and that it could take place on September 30—a year later than originally planned.

If the US government approves the plan, "then the contract between ICANN and the US government which is set to naturally expire on September 30 will just expire," Chehade said in an interview Wednesday in Washington.

Chehade said the private non-profit ICANN is effectively a "traffic cop" that ensures the Internet address system functions, and that the US government's role has been merely to ensure that it follows correct procedures.

"In all the years we've done that (the US government) has never said we did not follow the process," he said.

"People have aggrandized the role of the US government in what we do. But the change is actually minimal. It's important symbolically because the US was really a steward for the Internet, but for day-to-day accountability, it is minimal."

Who runs the Internet?

The US government, announcing its intention to end its role in March 2014, said it would seek to maintain a "multi-stakeholder" model for Internet governance—which allows virtually all users from business to academia to government to participate—instead of a "multilateral" system controlled by governments.

Chehade said that without US oversight, ICANN would be managing the technical functions of the Internet under the supervision of a 16-member board which is designed to maintain diverse representation.

"We have a very solid process that ensures this is not a capturable board," which can be hijacked by governments or other institutions, he said.

He added that the transition plan seeks "to strengthen the assurances that ICANN will remain multi-stakeholder," by giving Internet users more authority to appeal to overturn decisions or even to remove board members.

Chehade noted that even though the ICANN process can be "unwieldy," most decisions are made by consensus, with very few disputed votes in the organization.

He added that he expects a fresh round of hearings in Congress, following complaints by some US lawmakers that Washington is "giving away" the Internet and suggestions that it could be controlled by other governments.

"I think the concerns Congress has raised are very justified and genuine and therefore being prepared to address them is crucial," he said.

But Chehade noted that ICANN has effectively been handling its functions for a long time.

"The independence of ICANN has been proven to be working for many years," he said.

"It's been working and we are now simply admitting that. We are ending the symbolic role of the US government which should have been let go in 2000."

ICANN chief urges wide Internet control

 

Internet Corporation for Assigned Names and Numbers (ICANN) President and CEO Fadi Chehadé called for the "preservation of a decentralised, transnational and not too fragmented governance" of the Internet on Tuesday

The head of the private agency that acts as gatekeeper for the Internet called Tuesday for international discussions to ensure control of the web remains decentralised.

Fadi Chehade, president and CEO of the Internet Corporation for Assigned Names and Numbers (ICANN), called for the "preservation of a decentralised, transnational and not too fragmented governance" of the Internet.

He told a Geneva conference that the Internet should remain "polycentric" but that the private and public sectors should work together.

"Only initiatives involving the private sector and governments can successfully and effectively address crucial issues like cybercrime, taxation of e-commerce, and child protection," Chehade said.

ICANN, which is in charge of assigning domain names, is likely to break free of US oversight late next year.

Washington said in March it might not renew its contract with the Los Angeles-based agency, provided a new oversight system is in place that ensures the Internet addressing structure is reliable.

"ICANN is not and shall not be an island disconnected from other stakeholders," Chehade said.

The agency plans to submit a proposal on oversight to the US Department of Commerce next year.

In an interview published Tuesday in Swiss daily Le Temps, Chehade said the role of the United States—one of ICANN's 147 member countries—would remain important.

"If our DNA remains American, our openness to the world is a reality."

US Commerce Secretary Penny Pritzker pledged at a meeting of Internet leaders in October that the United States would "protect and preserve a free, vibrant and open Internet".

Pritzker said that while the United States might not renew its contract with ICANN, it still had a responsibility to encourage a decentralised Internet.

"The United States will not allow the global Internet to be co-opted by any person, entity, or nation seeking to substitute their parochial world view for the collective wisdom of this community," she said. - AFP

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