India, which is the second largest stake-holder in the China-backed Asian Infrastructure Investment Bank, has failed to secure a guarantee for the institution's vice presidency even as it asserted that Beijing has no veto rights despite having a say in its functioning.
Additional Secretary of Ministry of Finance Dinesh Sharma said that India could not press for the vice presidency as AIIB decided to hire meritorious candidates for such posts, instead of allotting it to countries based on shareholding.
"Though we argued for it. I personally was happy to loose that argument because they said the candidates will be decided by merit," Sharma said.
AIIB wanted to avoid the patron of allotment of posts followed by the BRICS New Development Bank, under which posts were decided by rotation, he said.
Sharma said he was "happy to lose" India's argument for Vice President post as institutions like the IMF and the World Bank were criticised for appointing only US and EU officials.
Asked how China got the presidency, he said it was not a cakewalk for Beijing as Russia had fielded a candidate, but it later withdrew.
"Chinese could not ensure the Presidency with their share holding. There is no insurance that China will have their President always. They have to get 50 per cent others to get President post. They can not ensure it," he said.
He also said China has no veto over the Bank.
"It has been ensured that the bank has truly multilateral operational principles not a 'Chinese Exim Bank' with veto rights for China," Sharma said.
India has been with China from the beginning ever since it was mooted by Beijing in 2013, he said.
China is the largest stakeholder with 26.06 per cent voting shares. India is the second-largest with 7.5 per cent, followed by Russia 5.93 per cent and Germany 4.5 per cent.
The AIIB is expected to lend $10 billion-$15 billion a year for the first five or six years and will start operations in the second quarter of 2016.
Even so, no specific infrastructure projects would be announced "for the time being", AIIB President Jin Liqun said on the sidelines of the launch.
The AIIB will require projects to be legally transparent and protect social and environmental interests, but it will not force borrowers to adopt the kind of free-market practices favoured by the International Monetary Fund.
(Agencies)
