Mohammad Pervez Bilgrami - India

The China-led Asian Infrastructure Investment Bank (AIIB) represents the start of a new fiscal world order that is not dependent on Western powers and not beholden to European or US interests.

The AIIB's 57 founding members assembled for a formal signing ceremony in Beijing on 29 June 2015 and included some of the fiercest critics as well as staunchest allies of the United States, which is opposed to the establishment an institution that can potentially challenge the dominance of the World Bank and International Monetary Fund (IMF).

The bank's authorized capital will be $100 billion, with China being its biggest shareholder with a 30.34 percent stake. China's voting rights would be 26.06 percent. India (8.52 percent), Russia (6.66 percent), Germany (4.57 percent), and South Korea (3.81 percent) are other key shareholders.

Turkey is the 11th largest shareholder with 2.52 percent shares in the Asian quota, which gives the country significant voting rights. The Beijing-based bank will use English as its operating language.

The AIIB becomes the first major international lending institution to be established since the famous Bretton Woods conference of July 1944 created the IMF and the World Bank, the loan sharks that extract their pound of flesh from nations in the most ruthless fashion.

It is the first time in more than 70 years that the US-backed Western financial institutions - the IMF, World Bank and Asian Development Bank - face the prospect of being seriously challenged by a formidable business rival.

Its establishment is a sign of the rise of Asian finance this century and also the deterioration of Western financial architecture that has held the world economy since the end of World War II.

The AIIB enjoys broad geographical support. Its members include Australia, Britain, Denmark, Holland, Italy, Kuwait, Malaysia, the Philippines and South Africa.

This shows that most countries feel the need to be part of something different from the Western-dominated "international" institutions.

The AIIB's 75 percent shares were reserved for Asian members, giving them a proportionately larger say in the bank's affairs. Important decisions require a majority of at least 75 percent of votes and approval of two-thirds of all member countries.

Unlike the Asian Development Bank, where more than 50 percent of shares are held by non-Asian Western member countries, the AIIB guarantees Asian control.

The AIIB will help in meeting the huge infrastructure funding needs of Asian economies, which have not been served well by Western-led institutions.

Asia is facing a huge gap between the demand and supply of project funding. The AIIB is expected to become an important source of capital for the region, thereby contributing to stable and sustainable growth. Importantly, this funding will be available without the harsh conditions that are normally attached with Western money.

China is also involved in another noteworthy financial institution, the New Development Bank, which is formed by the so-called BRICS countries (Brazil, Russia, India, China, and South Africa).

The emergence of the AIIB and BRICS bank should be seen as a new way forward in the emerging new world order.

These institutions must provide a new balance in the global financial system that has suffered from the reckless policies, unworkable orthodoxies and political manipulations of the US and its hardcore allies in Europe and Asia.

As per the unwritten law, the IMF head is always a European and the World Bank chief is an American.

For seven decades, the US and other Western powers have used their leverage on multilateral lending institutions to serve their foreign policy goals and economic hegemony projects. They have manipulated multilateral institutions to prop up friendly dictators and to undermine democratic countries with independent policies.

The US is particularly known to use its veto power in all the multilateral financial institutions to punish countries that disagree with its militarism and expansionism.

Besides being heavily biased against Asia, Africa and Latin America, Western-led institutions have also been plagued by corruption and sordid scandals. The Western-dictated global economic system has produced many crises, including the Asian financial and the 2008 global financial meltdown. Greed guides their policies. Despite the obvious follies in Western economics, no corrective steps are taken. As an example, we can see how it continues to be business as usual for Wall Street bankers, who are assured of full protection in their misdeed by the US ruling class. Wall Street thrives on frauds, but no serious Western government attempts were made to reform a system that caused the 2008 financial crisis.

Similarly, we can see the IMF and the World Bank continue to impose their economic orthodoxies despite their recipes proving disastrous all over the world.

It's not that efforts were not made before to develop regional and other multilateral institutions away from Western dependence. The Islamic Development Bank (IDB) was one such step from the 57-member OIC. But being dominated by Saudi Arabia, which is heavily reliant on the United States politically, militarily and economically, the IDB's limitations are more than apparent.

The IDB's resources are meagre and it lacks leadership and a grand economic vision. In this sense, the AIIB and BRICS bank are in a different league.

In fact, there is need and scope for more multilateral financial institutions. This is something that major OIC members, the Developing 8 (Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey) and Economic Cooperation Organization (ECO) countries (Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan, Uzbekistan, and Iran) should think about.

An initiative must be taken for an institution that will not be hobbled by the issues that have made the IDB an insignificant player in world finance. Most people would argue that the IDB has not lived up to the expectations of its members, has a low capital base, and its decision-making process is riddled with political incompetence and bureaucratic thoughtlessness. The IDB slept when the South East Asian financial crisis occurred, and it could not provide help to its members in 2008-09 economic troubles. It cannot come up with measures to help some of its members suffering in the current Middle East turmoil.

Any new institutions by big OIC economies should not try to replace the IDB with a new bank. Let the IDB sit idle where it is today and become defunct. Think anew, and think big. It should not be about rivalry with old or new financial institutions globally, but the new initiative must be focused on developing smart solutions in the new economic world order.