Twenty-one Asian countries signed a Memorandum of Understanding (MOU) on establishing the Asian Infrastructure Investment Bank (AIIB) as founding members today in Beijing in a ceremony at the Great Hall of the People. Chinese President Xi Jinping met with the representatives of the 20 other countries later in the day, Xinhua reported. The 21 countries are: Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, and Vietnam.
The AIIB’s authorized capital is $100 billion, and the initial subscribed capital is expected to be around $50 billion, with a 20% paid-in ratio.
The Prospective Founding Members are expected to complete the signing and ratification of the Articles of Agreement (AOA) in 2015, and AIIB will be formally established by the end of 2015.
Chinese President Xi Jinping told delegates after the ceremony:
“In China we have a folk saying. If you would like to get rich, build roads first, and I believe that is a very vivid description of the very importance of infrastructure to economic development.”
Xi told the other nations: “For the AIIB, its operation needs to follow multilateral rules and procedures. We have also to learn from the World Bank and the Asia Development Bank and other existing multilateral development institutions in their good practices.”
Japan, South Korea, Indonesia, and Australia did not join the bank, although there is an open debate in Australia on doing so, and the South Koreans are reportedly awaiting more clarification on some of the management structures of the bank before joining.
According to the Australian Financial Review today, U.S. Secretary of State John Kerry had personally pressured Australian Prime Minister Tony Abbott to keep Australia out of the AIIB. “Australia has been under pressure from the U.S. for some time to not become a founding member of the bank and it is understood Mr. Kerry put the case directly to the Prime Minister when the pair met in Jakarta on Monday—following the inauguration of Indonesian President Joko Widodo,” the paper said.
Washington sources close to the Obama Administration have confirmed the account, stressing that Washington is leery that China will dominate the new lending institution. More to the point, the Obama Administration is fully aware of the overall BRICS and Shanghai Cooperation Organization developments, which are weakening the vise-grip (or, rather, the vice-grip) of what is called the “Washington Consensus,” under which trans-Atlantic central banks and the International Monetary Fund have exerted a global dictatorship over finance.