07 November, 2014
China and 21 other countries have agreed to start an international development bank. The bank is called the Asian Infrastructure Investment Bank or AIIB.
The member nations include Myanmar, Vietnam, Laos, Cambodia, Vietnam and the Philippines. Among South Asian nations, India, Pakistan, Bangladesh and Nepal are also members.
In Beijing, China's Foreign Ministry spokeswoman, Hua Chunying, said finance ministers of the member countries are looking forward to how the AIIB can improve their countries.
Chinese President Xi Jinping said they all expressed a desire to pursue common development. Mr. Xi said the AIIB would support regional development and be inclusive and open.
Three countries did not take part in the bank's launch. Indonesia, Southeast Asia's biggest economy, Australia and South Korea did not join. But, South Korea said there would be no reason to not join the bank if certain conditions were met.
The U.S. State Department has criticized the proposal for the development bank.
Spokeswoman Jen Psaki says the U.S. has concerns about the unclear nature of the AIIB proposal as it currently stands. She said Secretary of State John Kerry has strongly urged that such a bank meet international standards of governance and transparency, or openness. She said he also made clear directly to the Chinese government that the U.S. welcomes the idea of an infrastructure bank for Asia.
The U.S. has also expressed concerns the bank will conflict with the World Bank and Asian Development Bank.
China's Foreign Ministry answered, saying the bank is meant to satisfy the infrastructure needs in the area.
Spokeswoman Hua said the new bank will be supplementary and complementary to other banks.
Ms. Hua said China and the 21 other members will cooperate to make the AIIB's financing structure open and inclusive.
China proposed the formation of the bank one year ago, and it is expected to begin operations next year. The bank is also fueling concerns that it will permit China to have too much influence in Asia. China will be the largest shareholder with a 50 percent share, and it will provide up to $50 billion in capital.
Supporters of the proposal say the bank, unlike the World Bank and Asian Development Bank, will center on infrastructure projects instead of poverty reduction. In 2009, the Asian Development Bank estimated the area would need $8 trillion in infrastructure investment by 2020.
I'm Mario Ritter.
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Words in this Story
pursue - v. to follow, to try to catch, or to be involved in
standards - n. a level of quality that is considered acceptable or desirable
infrastructure - n. basic equipment or structures such as roads, bridges, and ports that are needed for a country or area to operate properly
supplementary – adj. added or serving as a supplement: additional
complementary – adj. completing something else or making it better -used of two things when each adds something to the other or helps to make the other better
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