The newly created Asian Infrastructure and Investment Bank (AIIB) is open to the idea of admitting new members from countries that have not joined it. But it is unlikely to accept Taiwan as a new member.
This was evident in remarks made by Jin Liqun, president of the AIIB, which was launched Saturday in Beijing. This is the first major multilateral bank in which the United States and Japan are not members.
“AIIB door has been flung open and the door will stay open,” Jin said replying to a reporter’s question on whether it was ready to accept the United States and Japan as members.
On the question of Taiwan, Jin read out two clauses from AIIB rules, which indicate that membership is only available to sovereign states. Another rule indicates that AIIB membership is only available to countries that are existing members of other multinational development banks (MDBs) like the Asian Development Bank.
Slim chance for Taiwan
On both counts, Taiwan stands a slim chance of being accepted as an AIIB member. China regards Taiwan as part of its own territory, and does not allow any country to regard it as a sovereign nation. It is also is not a member of MDBs.
Analysts think Taipei might now try to assert itself as a sovereign nation and seek membership in international forums. The country recently went through elections, which swept out the earlier pro-China government and replaced it with a party that believes in greater independence for Taiwan.
The United States had earlier expressed concern about the new bank accepting looser lending standards compared to the World Bank. Some Western critics have said the AIIB may not be as strict as the World Bank in implementing environmental standards during loan approvals.
Jin countered the criticism on Sunday saying the AIIB is formulating a set of standards that would be in some ways superior compared to the ones used in existing multilateral institutions.
“We are finalizing our environment and social framework. The paper we have drawn up for ESF is as good as the other institutions, and in some respects better than them,” Jin, who earlier worked at the Asian Development Bank, said at a press conference.
Prudent management pledged
AIIB will have a strong compliance and integrity department to make sure there are no irregularities in the approval of loans, he said.
“The bank management will be very careful. It will put the last cent to use,” Jin said.
The new bank will lend in U.S. dollars but it will raise funds in different currencies, which include the euro and the yuan besides the dollar, the AIIB president said. This clarification follows suspicion expressed in some quarters the China backed AIIB might put its energies to promote the Chinese yuan as a stronger international currency.
Jin revealed that South Korea has offered to come up with additional funds to support AIIB’s activities besides its contribution in the share capital. This follows an announcement by Chinese president Xi Jinping on Saturday that China would provide an additional $50 million for infrastructure development in the less developed countries.