Osborne gives UK backing to Asian infrastructure bank

8 Apr 15

The UK has announced that it is to become a founding member of the Asian Infrastructure Investment Bank, which will provide finance for economic infrastructure projects in the region.

The UK is the first major Western country to apply to become a prospective member of the Chinese-led scheme. The move comes ahead of discussions expected later this month over the bank’s governance and accountability arrangements.

Announcing the plan yesterday, the Treasury said it would ensure transparency, which was vital to unlock the potential benefits for the wider global economy.

Chancellor George Osborne added that forging a tie between the UK and the Asia-Pacific region would help businesses work and invest in the world’s growing markets.

‘This government has actively promoted closer political and economic political and economic engagement with the Asia-Pacific region and forging links between the UK and Asian economies to give our companies the best opportunity to work and invest in the world’s fastest growing markets is a key part of our long-term economic plan,’ Osborne said.

‘Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together.’

However, it has been reported that the US has voiced its concern over the plan, warning that the AIIB could undermine existing multilateral institutions such as the World Bank and the Asian Development Bank.

‘We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks,’ said US National Security Council spokesman Patrick Ventrell said.

‘Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards.’

Once it is operation the AIIB will use a variety of support measures including loans, equity investments and guarantees to boost investment across a range of sectors such as transportations, energy, telecommunication, agriculture and urban development.

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