The secretariat of the Asian Infrastructure Investment Bank (AIIB) today officially announced that Israel had been approved as the bank’s 52nd out of 57 founding members.
The Chinese initiative for founding the multinational financial institution was designed to provide financing for infrastructure development projects in Asian countries – general development of the region. The founding of the bank is slated for completion towards the end of this year.
The bank’s founding is arousing concern in the US, which fears that it is the start of a process that will eventually end the dominance currently enjoyed by the US in the world’s important financial institutions. Former US Secretary of the Treasury Lawrence Summers even warned 10 days ago that “This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system.”
The new banking consortium being led by China, which is designed to support investments in Asian economies and emerging markets, will directly compete with the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB), the traditional international sources of financing founded with US aid, on which the US exerts great influence.
The US has asked countries to refrain from joining the new bank until it presents adequate standards of management, society, and the environment, but US allies around the world, including close allies like UK, Germany, and Australia, have nevertheless announced they will join it, forcing the Obama administration to issue a statement of opposition to the bank.
Israel’s accession to AIIB is a result of extensive activity by the Israeli embassy in Beijing, in cooperation with the Ministries of Foreign Affairs and Finance in Jerusalem.
The Ministry of Foreign Affairs said today, “With this important move, Israel is joining a new international economic forum in an important theater of dynamic economic growth. Israel’s accession is expected to open a large new area of opportunities for including Israeli companies in projects financed by the new bank.”
Israel will join the upcoming round of talks for the founding process scheduled at the end of this month in Beijing.