Social Risk Management at AIIB – Chinese or International Characteristics?

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.