Question map
With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements : 1. AIIB has more than 80 member nations. 2. India is the largest shareholder in AIIB. 3. AIIB does not have any members from outside Asia. Which of the statements given above is/are correct?
Explanation
The correct answer is option A (1 only).
**Statement 1 is correct**: AIIB has a membership of 103 nations [85 members (including India) + 18 prospective members][2], which is more than 80 member nations. More recent sources indicate even higher membership numbers.
**Statement 2 is incorrect**: China dominates AIIB[3], making China, not India, the largest shareholder in the bank. The idea of establishment of such bank was proposed by China to provide support and improvement in infrastructure building in the Asia-Pacific region[2], which further confirms China's leading role.
**Statement 3 is incorrect**: Due to the discontent in the West-dominated multilateral bodies such as IMF and World Bank, many of their members are joining AIIB[2]. This indicates that AIIB has members from outside Asia, including Western nations. The United States and Japan are not members of AIIB[3], but this doesn't mean all non-Asian countries have stayed out—many European and other nations have joined.
Therefore, only statement 1 is correct.
Sources- [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 532
- [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 532
- [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 533
PROVENANCE & STUDY PATTERN
Full viewThis is a classic 'Comparative Institutions' question. It rewards standard textbook reading (Singhania/Vivek Singh) over random current affairs. The core test is distinguishing between the 'Name' (Asian) and the 'Nature' (Global membership), and knowing the hierarchy (China vs. India).
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: How many member nations does the Asian Infrastructure Investment Bank (AIIB) have?
- Statement 2: Which country is the largest shareholder of the Asian Infrastructure Investment Bank (AIIB) by subscribed capital?
- Statement 3: Which Asian Infrastructure Investment Bank (AIIB) member countries are from outside Asia?
- Gives an explicit numeric total for AIIB membership: 103 nations.
- Includes a bracketed breakdown that supports the presented total (an 85 + 18 composition).
- Is a direct descriptive line about AIIB's present membership size.
- Explicit line that 'China dominates AIIB', directly identifying Chinese dominance in the institution
- Contrasts AIIB with ADB where Japan and the US dominate, reinforcing that China — not other major powers — is the lead shareholder
- Notes that the United States and Japan are not members, which strengthens the case for China's preeminent position
- States the idea of establishing the bank was proposed by China, linking founding initiative to Chinese leadership
- Describes AIIB's purpose to improve infrastructure in Asia, consistent with China's central role in the bank's creation and influence
- Identifies AIIB headquarters in Beijing, signaling institutional ties to China
- Notes AIIB was founded to address infrastructure needs across Asia, aligning with China's foundational role
States AIIB membership is open to members of the IBRD or the Asian Development Bank (ADB), both of which include non-Asian countries.
A student could list IBRD/ADB members that are outside Asia (using standard lists/world map) to identify eligible non-Asian AIIB members to check against AIIB membership lists.
Says 'many of their members are joining AIIB' referring to Western-dominated bodies, indicating that countries from outside Asia (Western countries) have joined AIIB.
Use the hint that Western countries joined to scan likely Western countries (Europe, North America, Oceania) against AIIB membership lists or known participants.
Gives AIIB's total membership size (membership of 103 nations), implying membership is large enough that it likely includes non-Asian states.
Compare the large total membership with a count of Asian countries to infer there must be members from outside Asia and then check specific names.
Notes the ADB has member countries 'even from outside Asia such as the United States', illustrating that regional banks can include non-regional members — relevant because AIIB admits ADB members.
A student could take examples of non-Asian ADB members (like the US) as a template for searching which non-Asian states might also join AIIB.
Contains the examination item that explicitly tests the claim 'AIIB does not have any members from outside Asia', showing this is a contested factual point.
Use this clue to treat the claim skeptically and cross-check AIIB membership against country locations (Asia vs outside Asia) using an external member list or map.
- [THE VERDICT]: Sitter. Directly solvable from Nitin Singhania (Ch 18) or Vivek Singh (Ch 13). No obscure sources needed.
- [THE CONCEPTUAL TRIGGER]: International Financial Institutions (IFIs) – specifically the 'New Age' banks (AIIB, NDB) vs. 'Bretton Woods' (WB, IMF).
- [THE HORIZONTAL EXPANSION]: Create a 5-column matrix for AIIB, NDB, ADB, World Bank, and IMF covering: 1. Headquarters (Beijing vs. Shanghai vs. Manila), 2. Largest Shareholder (China vs. Equal vs. Japan/US), 3. Voting Style (Share-based vs. Consensus/Equal), 4. India's Rank (2nd in AIIB), 5. Membership Scope.
- [THE STRATEGIC METACOGNITION]: Never assume a bank's membership is restricted by its regional name. Always check three specific parameters for every body: 'Is India a member?', 'Who holds the Veto/Largest Share?', and 'Is it open to the world?'.
AIIB's total number of member nations (103) is a primary factual attribute needed to answer membership-count questions.
High-yield factual knowledge for questions comparing multilateral development banks; helps in quick elimination in MCQs and supports mapping of institutional scale. Connects to topics on international financial institutions and India's international engagements.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 532
AIIB opens membership to members of the IBRD or the ADB, defining its eligible pool of countries and shaping its composition.
Understanding formal eligibility clarifies why certain countries can join and aids prediction of membership changes; useful for questions on institutional rules, geopolitics of bank expansion, and comparisons among MDBs.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 13: International Organizations > 13.15 Asian Infrastructure and Investment Bank (AIIB) > p. 400
Major global economies such as the United States and Japan are not members, which influences AIIB's geopolitical balance despite its membership size.
Important for analytical questions on influence, governance and regional vs global participation in MDBs; helps frame comparisons with ADB and World Bank and explain strategic alignments in international finance.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 533
China exercises primary control and influence over AIIB through dominant shareholding and founding initiative.
High-yield for questions on multilateral banks and geopolitics; explains shifts in institutional power in Asia and helps contrast AIIB with older institutions. Useful for questions on China's expanding multilateral influence and for comparing voting power across development banks.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 533
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 532
AIIB lacks major western members like the US and Japan, unlike ADB, which affects relative influence within each bank.
Important to distinguish institutional alignments and geopolitical blocs in banking questions; helps answer comparative questions about regional vs global membership and voting dominance.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 533
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN DEVELOPMENT BANK > p. 530
The country that proposes, founds, and hosts a bank's headquarters often holds substantial influence over its direction and capital structure.
Useful rule-of-thumb for UPSC: link institutional origin and HQ location to likely leadership and policy orientation; aids quick reasoning in MCQs and mains answers about institutional control.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 13: International Organizations > 13.15 Asian Infrastructure and Investment Bank (AIIB) > p. 400
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 18: International Economic Institutions > ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB) > p. 532
AIIB membership is open to members of the International Bank for Reconstruction and Development (IBRD) or the Asian Development Bank (ADB).
High-yield for UPSC questions on multilateral banks: explains how membership rules can allow non-regional states to join a regional bank, linking to questions on governance and geopolitics of MDBs. Helps answer comparative questions about eligibility and expansion of international financial institutions.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 13: International Organizations > 13.15 Asian Infrastructure and Investment Bank (AIIB) > p. 400
India is the largest borrower of AIIB funds, despite China being the largest shareholder. Also, unlike AIIB, the New Development Bank (NDB) assigns equal voting rights to its founding members, meaning China does not dominate NDB voting like it does in AIIB.
Apply the 'Capital Logic' filter to Statement 3. A 'Bank' needs a AAA credit rating to lend cheaply. To get AAA, it needs capital from wealthy, developed nations (Europe/North America). Therefore, a statement saying it has 'no members from outside Asia' is economically illogical for a major development bank. Eliminate Statement 3.
Mains GS-2 (IR): Contrast the 'Beijing Consensus' (State-led infrastructure lending via AIIB) with the 'Washington Consensus' (Structural adjustment via IMF/WB). Use AIIB as an example of China creating parallel global governance structures.