South Africa and Egypt were among the 57 founders of the Asian Infrastructure Investment Bank, AIIB, which was approved yesterday in Beijing, China. The bank, championed by China, was heavily lobbied against by the United States America, which it considers a rival to the World Bank. Not only did the US lobby fail in its bid to stop the AIIB’s take-off, some of its closest allies have also joined the bank, among them Britain, Italy, France and Spain. Egypt, the second largest recipient of US aid, and South Africa, also joined the new ship just days before it launched.
The AIIB was proposed by the government of China as a response to the need to close Asia’s $8 trillion infrastructure investment gap. The Asian giant had also been frustrated by the West’s dominance and its little say in the World Bank, IMF and Asian Development Bank. The US openly kicked against the formation of AIIB, saying it was worried the bank would not meet the high standards expected of global financial institutions. The Western power also pressured its major allies in the region and Europe against joining the bank, but only Japan and Canada refused the AIIB. However, the new bank refused the applications of Taiwan, the US’s close friend, and North Korea, its number one enemy.[pro_ad_display_adzone id=”10″]
What’s in It for Africa?
Although the AIIB will be focused on investing in Asia, Egypt and South Africa’s member status mean they would also draw in funds badly needed for its own infrastructure development. A former assistant to the executive director of the International Monetary Fund (IMF), told the Daily News Egypt that African members will gain noticeable benefits in raising funds for its in infrastructure development. “Member countries will benefit by receiving infrastructure investments from the AIIB.”
The AIIB begins with an initial capital of $50 billion, although that figure will be doubled in the nearest future. The bank says its modus operandi will be lean, clean and green; “Lean, with a small efficient management team and highly skilled staff; clean, an ethical organization with zero tolerance for corruption; and green, an institution built on respect for the environment”.
Against popular fears of an international financial rivalry, the AIIB says it will complement and cooperate with other multilateral development banks (MDB), such as the World Bank and IMF. The bank also says it is open to all countries regardless of region of financial status. “AIIB welcomes all regional and non-regional countries, developing and developed countries, that seek to contribute to Asian infrastructure development and regional connectivity,” the bank explained on its website.(VENTURES AFRICA)