Sukur’s homeland isn’t being destroyed just in the name of money. No, it is even done in the name of sustainability. “At first we didn’t know what would happen after some of us signed the contracts,” explains the village chief, who casually wears a belly bag around his neck but, like many of his neighbors, has no last name. “Then the first palm trees were felled.”
Sukur’s settlement is on a beach in Lombok. This is the smaller, unknown island next to the holiday paradise of Bali in Indonesia. Right next to his village, a resort complex is being built around the “Mandalika International Street Circuit”, a motorcycle racing track. The spectators reside in expensive hotels, and a Kempinski is scheduled to open here in 2027. Plus water parks and golf courses. Sukur and the other fishermen in his village are to make way for the fact that professional motorcyclists throw themselves into the tight bends here a few times a year.
Germany is the fourth largest shareholder after China, India and Russia
The resort project is mainly financed by the Asian Infrastructure Investment Bank (AIIB), and thus also with German tax money. After China, India and Russia, Germany is the fourth largest shareholder in the development bank, which is based in Beijing. In the eyes of the critics, the Mandalika project is symbolic of all the problems that exist with the AIIB. And the critics have had yet another argument since the bank’s communications chief, Canadian Bob Pickard, fled Beijing last week to tweet to warn the world about the bank’s “toxic culture” and Chinese Communist Party infiltration. The insider thinks Western countries shouldn’t have anything to do with the bank anymore. Canada announced an investigation into the allegations. Pressure is also increasing on the federal government to explain why it still wants to be involved in this prestigious Chinese project. And that shortly before the start of consultations with the Chinese government in Berlin.
A battle for the bank’s credibility is raging. In the center is a German tax official: Ludger Schuknecht. The 61-year-old was once chief economist in the Ministry of Finance under Wolfgang Schäuble (CDU) and chief negotiator for Germany’s 2015 accession negotiations to the AIIB. Since 2021, he has been Vice-President of the Bank, responsible for the governance structure and relations with member countries.
You can reach him via video call on a bus in the Beijing area. The camera shakes clearly, Schuknecht’s glasses and high forehead are particularly recognizable. Despite his dismay, Schuknecht welcomes the Canadian investigation. If he were still in the Berlin Ministry of Finance, he would have “done it the same way,” he says. “Somebody made serious accusations and said that he felt his security was threatened. You have to take that seriously, especially in the environment with Ka-…” Here he ends the sentence. He probably means the fact that China and Canada currently have a historically bad relationship.
“The allegations are baseless”
Following Pickard’s resignation, the AIIB launched its own investigation to report to the bank’s board of directors. “Full transparency” promises Schuknecht. For him, the result is pretty clear: “The allegations are baseless”. He has never noticed anything about a toxic work culture. Of course, the bank isn’t perfect: “We’re only seven years old, so there’s always room for improvement.” But there are modern structures, such as an ombudsman for complaints.
What happens behind the scenes at the AIIB will now be examined.
(Photo: Jade Gao/AFP)
Pickard had written on Twitter that the bank had been infiltrated by members of the Communist Party comparable to the “KGB or Gestapo or Stasi”. The Financial Times he said he had written twice in the past month to express his concerns about the influence of the Communist Party internally. Schuknecht says he has checked the internal complaints procedures: “Pickard has never complained through these channels, I can see that.” Overall, interventions by the Communist Party in the work of the bank have never played a role. Of course, “some colleagues”, including his boss, AIIB President Jin Liqun, are members of the CP. Nevertheless, Schuknecht assures: “We are completely apolitical.”
There is one thing that a race track is definitely not: a green infrastructure project
He thinks that the AIIB commitment serves German interests. On the one hand, the bank’s investments in green infrastructure projects are important for the fight against climate change. Schuknecht does not accept the objection that the AIIB is also promoting the expansion of Antalya Airport, a gas-fired power plant in Bangladesh or the Mandalika project. When projects are awarded, strict attention is paid to climate-related improvements, but also to improvements in living standards and local conditions.
If you talk to the fishermen on Lombok, you will have doubts. In 2020 and 2021, some of them had sold their land far too cheaply. Ever since racing has started, they have been fighting back and demanding decent compensation for the loss of their land. But the AIIB and the Indonesian government ignore them. Before the race days, the police and military even come and intimidate the remaining residents. Only last weekend were AIIB representatives on site again to find out about the progress of the work. But according to local non-governmental organizations, residents were not even consulted.
Schuknecht says Germany played an “enormously important role” in establishing international standards in the bank. Furthermore, Germany, together with the other western member states, holds more than 25 percent of the voting shares and thus has a right of veto on questions regarding the structure and standards of the bank – just like China. It is well known that China places few demands on compliance with environmental and human rights standards when financing international projects as part of its New Silk Road Initiative.
The boss’s power? A “great vote of confidence”
The Federal Ministry of Finance has a representative on the AIIB board of directors who has a say in projects and can ask questions. Earlier SZ research left the impression that the federal government had not campaigned very vehemently for clarification, at least in the case of the Mandalika project. “For years we have been hearing from the European shareholders of the AIIB that they have little influence and that positive changes are therefore hardly possible,” explains Nora Sausmikat from the NGO Urgewald. She criticizes that many projects are decided by President Jin alone. Schuknecht calls his boss’s power a “great vote of confidence” on the part of the member countries. This will “save a lot of time”.
The Federal Ministry of Finance is committed to the AIIB. This enjoys a “high level of trust on the international capital markets,” it says. One will nevertheless “actively” participate in the bank’s internal investigation into Pickard’s allegations.
The discussion about the AIIB is difficult to convey to the remaining villagers around the Lombok race track. They prefer to know how and where they can live on. The Mandalika project looks like the usual Chinese zero-sum tourism, which is also known from Thailand, Vietnam and Laos: International companies build resorts where their customers then spend money that flows back abroad. Little remains for the local people.
It’s not a good idea to move fishermen to the mountains
The displaced now live in the hills of Lombok. You need a four-wheel drive vehicle to be rocked up there, over a muddy, steep road, quite a long way through the forest before you reach the newly built settlement. It looks like a model village for color blind people. Bordeaux-colored roofs, yellow foundations, at least a nice view over the hills. However, you don’t have to be an infrastructure expert to realize that relocating fishermen to the mountains is not a good idea.