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Japan, World Bank funds "no threat" to AIIB

2015-May-22       Source: Global Times Net

Japan and the World Bank's separate plans to fund infrastructure projects in Asia will increase competition, but not threaten the role of the Asian Infrastructure Investment Bank (AIIB) in Asia's huge infrastructure market, experts said Thursday.

Germany eyes director seat on AIIB board

Japan and the World Bank's separate plans to fund infrastructure projects in Asia will increase competition, but not threaten the role of the Asian Infrastructure Investment Bank (AIIB) in Asia's huge infrastructure market, experts said Thursday.

Japanese Prime Minister Shinzo Abe announced on Thursday that the country will provide $110 billion to help develop infrastructure projects in Asia over the next five years, Reuters reported.

World Bank President Jim Yong Kim on Wednesday also pledged up to $11 billion in new financing over the next three to four years to Indonesia, in the energy, health, education and maritime economy sectors, including the delivery of services at the local level, said a statement on the bank's website.

The announcements came at a time when representatives of 57 prospective founding members of AIIB meet this week in Singapore to discuss the draft Articles of Agreement and operational policies of the bank.

"Japan and the U.S.-dominated World Bank strengthened efforts to invest in Asia's infrastructure after they saw the AIIB's influence and its potential role in the region," Han Meng, a research fellow at the Institute of Economics of the Chinese Academy of Social Sciences, told the Global Times Thursday.

But the infrastructure funding gap in Asia is so large that all countries are welcome to work together to boost the region's development, experts said. The Asian Development Bank estimated that Asia needs to invest more than $8 trillion in infrastructure projects between 2010 and 2020 to connect its economies to each other and the world.

"Both plans will increase competition and promote investment efficiency but not become threats to the AIIB, because even with the combined effort of Japan and the World Bank, the total investment of the three parties still could not meet the huge financing demand in the region," Ding Yifan, deputy director of the Institute of World Development at the Development Research Center of the State Council, told the Global Times Thursday.

Japanese and Chinese finance officials are expected to hold talks on June 6 in Beijing to discuss ways to promote cooperation between the two countries. The two sides may exchange views on the AIIB, Reuters reported Thursday, citing unnamed Japanese officials.

Han said Japan's wait-and-see attitude toward the AIIB reflects the dilemma it faces. "Being a major player in Asia, Japan wants to join the bank, but its alliance with the U.S. has made it hesitate," he said.

Details of the AIIB's three-day meeting have not been released so far, but the South China Morning Post (SCMP) reported Wednesday that Germany will have a director on the board of the AIIB, citing German Ambassador to China Michael Clauss.

However, the German Embassy reached by the Global Times Thursday said the report was "inaccurate" and the ambassador was merely expressing an expectation.

"As to an AIIB office in Europe, no decisions have been taken," the embassy wrote in an e-mail.

 

Editor: Will

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