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World Bank Welcomes AIIB

World Bank Welcomes AIIBWorld Bank Welcomes AIIB

The head of the World Bank has welcomed the Chinese-led bank for investments in infrastructure as a way of fighting poverty. Germany formally joined the AIIB at the start of the month.

The World Bank plans to work with the Asian Infrastructure Investment Bank (AIIB) to fight poverty and to fund infrastructure projects. World Bank president, Jim Yong Kim, said the World Bank and AIIB could co-finance individual infrastructure projects, or work on regional integration, DW reported.

Speaking at the Washington-based Center for Strategic and International Studies on Tuesday, Kim said, “With the right environment, labor and procurement standards, the AIIB and the New Development Bank, established by the BRICS countries, have the potential to become great new forces in the economic development of poor countries and emerging markets.”

More than 50 countries including Germany, France and Britain have joined China’s initiative. Germany’s membership was formally approved at the start of the month. The $50 billion (46 billion euro) multilateral infrastructure bank is to provide project loans to countries across Asia. It plans to begin operations at the end of the year.

The BRICS developing nations (Brazil, Russia, India, China and South Africa) are also working on a development institution, but there have been disagreements over funding and management.

  Kim Agrees to Help

“I will do everything in my power to find innovative ways to work with these banks,” Kim said. “The decisions we make this year, and the alliances we form in the years ahead, will help determine whether we have a chance to reach our goal of ending extreme poverty in just 15 years.”

Kim said he plans to meet with Chinese officials next week during the spring meetings of the IMF and World Bank to discuss collaboration.

The United States, Canada and Japan have not joined the AIIB. North Korea’s application was rejected.

The US government has said it supports co-financing projects with the AIIB and existing institutions such as the World Bank and the Asian Development Bank, in order to ensure appropriate safeguards are put in place to protect the environment and people affected by the projects.

Coordinated Development

Seeking to allay such fears, the Chinese President Xi Jinping said recently that his country would promote “coordinated development between the Asian Infrastructure Investment Bank (AIIB) and multilateral financial institutions such as the Asian Development Bank and World Bank.”

Xi also called on the world’s nations to support Beijing’s ideas for a new development bank that some see as a potential rival to the western-dominated International Monetary Fund and World Bank and the Japanese-dominated Asian Development Bank.

Chinese state-run news agency Xinhua reported that Russia and Australia also planned to join, while Dutch Prime Minister Mark Rutte said on his Facebook page that the Netherlands will also apply.

Financialtribune.com