Australia, an ally of the United States, has finally enlisted to become one of the founding members of the Chinese-led Asian Infrastructure Investment Bank (AIIB). Not only has it enlisted, it has also pledged to contribute AU$930 million ($718.5 million; £455 million), making it the sixth biggest shareholder of the bank that could rival and topple the U.S.-Japan World Bank in the region.
Foreign Minister Julie Bishop and Treasurer Joe Hockey said in a joint statement that Australia’s participation into the “Chinese World Bank” will not only give it opportunities to work with China, its largest export market, but also with other neighbors in the region. The collaboration is sure to drive economic growth and jobs for Australia, they added.
“It provides massive new opportunities for Australia to join with 56 other countries as founding members in building the essential infrastructure for Asia, which will facilitate more trade in agriculture, in resources and ultimately in services that will be to the great benefit of everyday Australians,” Hockey later told Parliament.
The paid-in capital Australia pledged to the AIIB will be made over five years.
The Business Council of Australia, the Australian Industry Group and the Australia Chamber of Commerce and Industry all lauded the country’s entry into the AIIB.
AiGroup chief executive Innes Willox, quoted by The Australian, said it was but proper that Australia joins the Chinese-led bank “given our national ambitions to be more thoroughly engaged in the Asian region.”
As a founding member and sixth biggest shareholder, BCA chief executive Jennifer Westacott said Australia can play a key role in setting the direction of the bank and how it will finance projects to make sure that it properly addresses Asia’s infrastructure gaps.
ACCI chief executive Kate Carnell is positive the AIIB will help propel economic development not just in Australia but in the entire region, specially since there sits a US$8 trillion infrastructure financing gap in the Asian region over the current decade alone. “Australia benefits when countries in our region have better infrastructure, including ports, airports, road, rail and power supplies, because it helps to facilitate trade.”
The China-led AIIB has a total of 57 prospective founding members. The United States and Japan didn’t join, although China said they are much welcome to do so. The bank will have a paid-in capital of US$20 billion and total authorized capital of US$100 billion.
“Better infrastructure across Asia will make it easier for Australia, a major producer of everything from coal and gold to beef and wheat, to ship its produce to buyers in developing economies,” Hockey said.