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Social Risk Management at AIIB – Chinese or International Characteristics?

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Abstract

The Asian Infrastructure Investment Bank (AIIB), amongst its other Asia-based financing, provides a small but important multilateral financing alternative to bilateral flows for China’s massive new Belt and Road Initiative (BRI). Focussing on AIIB’s Environmental and Social Framework (ESF) this paper explores the conceptualisation of social risk, asking whether it is predominantly shaped by China’s own experience with growth by infrastructure and related tools such as the Social Stability Risk Assessment (SSRA) or whether it owes more to social sustainability standards of pre-existing multilateral lenders. Based on key person backgrounder interviews in late 2016 and documentary review, including of AIIB’s inaugural loan approvals, the authors find more evidence of international than national characteristics, confirming AIIB’s adoption of its ESF as institutional isomorphism. This conclusion brings new perspectives to debates on the BRI’s underlying development model with particular emphasis on the potentially enhancing inclusion of the UN Sustainable Development Goals (SDGs). Delivering positive outcomes for people affected by AIIB projects is vital for keeping the international support that also affects the success or failure of the entire BRI.

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Notes

  1. By 19 Dec 2017 AIIB has 61 full member countries (40 regional and 21 non-regional) and 23 prospective members (8 regional and 15 nonregional countries, including 7 Latin American countries), https://www.aiib.org/en/index.html.

  2. The authors draw upon five confidential backgrounder interviews with key personnel from pre-existing MDBs, from AIIB and from national Chinese organizations conducted during August–November 2016. We are grateful to the experts for sharing their time and knowledge with us.

  3. Social assessment (shehui pingjia) as defined here includes the identification, planning and management for social issues throughout the project cycle, including the scoping and assessment of social impacts (shehui yingxiang) and social risks (shehui fengxian), measures designed to enhance social benefits, mitigative measures and the preparation and management of social safeguard plans, such as resettlement plans.

  4. The selection list has nearly 50 single risk items grouped into 8 broader risk fields such as risks within (1) the political planning and approval procedure; (2) land and house acquisition and compensation; (3) technical and economic programs; (4) environmental damage; (5) improper project planning and management; (6) socioeconomic impacts; (7) media opinion; (8) peripheral public opinion guidance ([38]:164).

  5. On January 1, 2017, the People’s Republic of China’s Law on Administration of Activities of Overseas Non-Governmental Organizations on Mainland China became effective, requiring foreign NGOs to accept a high level of state oversight and control over all their activities by public security authorities and Chinese professional supervisory units. Observers fear the law will hinder collaboration between international and Chinese NGOs and subordinate Chinese NGOs to serve the state’s interest.

  6. A researcher from the Chinese Ministry of Commerce

  7. Myanmar example demonstrates how ignorance regarding ethnic minority conditions led to internal fighting.

  8. AIIB posting 27 April [3], Beijing. “We are taking a very open and collaborative approach to establishing our complaints mechanism because its design needs to be responsive to the people who will use it,” said Hamid Sharif, Director General, CEIU. Following best practices in transparency and accountability, the CEIU timeline will take a two-phased approach to stakeholder consultations, including an indicative timeline for the adoption of the mechanism’s procedures. Accessed 2 May 2017 at https://www.aiib.org/en/news-events/news/2017/20170427_001.html.

  9. During the first official Belt and Road Forum for International Cooperation in Beijing (May 14–15, 2017) UNDP and the Chinese government, represented by NDRC, signed an Action Plan for the BRI focusing on information exchange and coordinated policies.

  10. The Chinese database „China Academic Journals” (China National Knowledge Infrastructure CNKI) shows 3477 Chinese journal articles on the BRI (yidai yilu) between 2014 (14) and 7/2017 (969); 2015:834; 2016: 1660. For the same time frame and the key word “Belt and Road” the data base Scopus comes up with 622 journal articles and “New Silk Road” comes to 191 hits.

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Authors and Affiliations

  1. Institute of Chinese Studies, Freie Universität Berlin, Fabeckstr. 23-25, 14195, Berlin, Germany

    Bettina Gransow

  2. College of Asia and the Pacific, Australian National University, Canberra, ACT, 0200, Australia

    Susanna Price

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  2. Susanna Price
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Correspondence to Bettina Gransow.

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Gransow, B., Price, S. Social Risk Management at AIIB – Chinese or International Characteristics?. J OF CHIN POLIT SCI 24, 289–311 (2019). https://doi.org/10.1007/s11366-018-9553-8

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