50 nations sign up to new asian bank
Print Edition
China will hold over a quarter of the votes in the new Asian Infrastructure Investment Bank, its finance ministry said yesterday as countries from five continents gathered in Beijing to sign up to the lender.
Delegates from 57 countries witnessed the signing of the articles of agreement for the development bank some see as a rival to the World Bank and the Asian Development Bank.
Fifty countries signed the agreement, the ministry said, including Iran, Australia, Georgia and Britain. Seven — Denmark, Kuwait, Malaysia, the Philippines, Holland, South Africa and Thailand — refrained from signing as they have not yet won domestic approval. They are likely to do so later in the year.
The ministry said China would have 26.06 percent of the voting rights in the bank. India is the second biggest at 8.4 percent with Russia third on 6.5 percent.
The United States, which initially cautioned nations against joining, has expressed concern over how much influence China will wield in the new institution. China has maintained it will not have veto powers, unlike the World Bank where Washington has a limited veto.
Vice Finance Minister Shi Yaobin said China did not seek a veto, describing its stake and voting share in the initial stage as a “natural result” of current rules.
The ministry added that the initial stakes and voting rights of China and other founding members would be gradually diluted as other members joined.
The AIIB was proposed by President Xi Jinping in October 2013. A year later, 21 Asian nations, including China, India, Malaysia, Pakistan and Singapore, had signed an agreement to establish the bank.
Despite the opposition of Washington, almost all major US allies — Australia, Britain, Germany, Italy, the Philippines and South Korea — have joined.
The major holdouts are Japan, the United States and Canada.
“This proposal was designed to meet Asia’s infrastructure development and promote Asia’s connectivity and also deepen regional cooperation for the sake of development,” Xi said during a meeting with foreign envoys in the Great Hall of the People in Beijing. “The very fact that representatives from the 57 prospective founding members are gathering in this room today is testimony to this spirit of solidarity, cooperation, openness and inclusiveness.”
Signalling China’s central role at the bank, he added: “Now we are willing to listen to your views and proposals.”
The bank is due to start operations by the end of the year. It will be headquartered in Beijing, and English will be the working language.
Like the World Bank and the Asian Development Bank, the bank’s officers will get tax-free salaries.
China will be the bank’s biggest shareholder by subscribed capital with a 30.34 percent stake, followed by India, Russia, Germany and South Korea. The AIIB’s authorized capital will be US$100 billion.
Countries defined as “within the region” will hold a 75 percent stake in the bank.
Johann Schneider-Ammann, head of Switzerland’s federal department of economic affairs, education and research, said the AIIB was a “necessary supplement” to other multilateral development banks and stressed the need for compliance to international standards in terms of transparency and governance.
“I am thus glad to know that it is the AIIB’s declared objective to position itself as a responsible player among the multilateral development banks,” he said.
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