Economy, Business And Markets

AIIB to Launch in 2016 With Iran as Founding Member

AIIB to Launch in 2016 With Iran as Founding Member
AIIB to Launch in 2016 With Iran as Founding Member

Asian Infrastructure Investment Bank will officially launch business in 2016 with 57 prospective funding members, including the Islamic Republic of Iran.

Iran made its bid to become a founding member of the Chinese-led bank early at its inception, which was finally accepted on April 3 this year. The negotiations to join the bank were led by the ministries of economy and foreign affairs, Mehr News Agency reports.

Representing Iran in the AIIB talks was Mohammad Khazaei, deputy economy minister who helped secure a place in the bank which is set to become a rival of International Monetary Fund (IMF).

The decision to approve Iran as a member was made by other members, including China, Britain, France, India and Italy.

The investment bank also accepted Australia and Russia into its fold back in April. The acceptance of these many countries has made US, which was the main opponent of the bank as it sees it as a threat to the West-dominated IMF, to take a step back. Washington has recently shifted its tone toward the AIIB.

AIIB is also a rival to World Bank and the Manila-based Asian Development Bank which is dominated by Japan and the US. The three multinational lenders have welcomed the AIIB and declared readiness to work with it.

The China-led infrastructure bank is expected to launch with an initial subscribed capital of $50 billion and focus on financing energy, transport, telecommunications and environment projects.

For Iran, inclusion in the new development bank is another positive step on the global stage. With an imminent nuclear deal expected at the of end of June,  sanctions that had been intensified against Iran in recent years will be lifted, paving the way for the 80-million-strong country to play a stronger role in world markets.

Intensification of sanctions has barred international banks from working with Iranian banks.

In a recent meeting of bank executives, Farhad Nili, head of the Monetary and Banking Research Institute, urged banks to break free from the backward state that has befallen them because of the nuclear-related sanctions.

“In a post-sanctions era, banks should be able to display professionalism that is required of them and come out of the sidelines and become key players in the international arena,” Nili told the bankers.