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Asia Today ISSN 1861-4604 Friday, October 20, 2017

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IMF indicates it will cooperate with China-led Asian Infrastructure Investment Bank

Asian Infrastructure Investment Bank

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BEIJING, China - Christine Lagarde, head of the International Monetary Fund has said the organisation would be "delighted" to co-operate with the newly established China-led Asian Infrastructure Investment Bank (AIIB), despite US criticism.

The AIIB has more than 30 members and is envisaged as a development bank similar to the World Bank, although US fears of a rival to the American-dominated World Bank have seen Washington being unusual critical of its allies that have joined the AIIB.

Lagarde said there was "massive" room for IMF co-operation with the AIIB on infrastructure financing, one of the key goals of the new organisation, which has been joined by the UK, France and Germany.

The US has criticised the United Kingdom and other allies for supporting the bank, saying that the bank's commitment to international standards on governance could not be assured.

This despite the fact that both the Great Depression in the 20th century and Great Recession in the 21st century originated due to unethical and illegal banking practises in the US.

"There will be times when we take a different approach," a spokesperson for British Prime Minister David Cameron said about the rare rebuke from the United States.

The AIIB, which was created in October by 21 countries, led by China, will fund Asian energy, transport and infrastructure projects, according to its founding documents.

London has insisted that it will demand the bank adhere to strict banking and oversight procedures in order to retain the UK as a member.

"We think that it's in the UK's national interest [to join AIIB]," said Cameron's spokesperson.

Pippa Malmgren, a former economic advisor to US President George W Bush, has said that the public chastisement from Washington indicates the move by the UK might have come as a surprise.

The US sees the AIIB as a rival to the World Bank, and as a means for Beijing to extend its influence in the region, much as the US has done with the World Bank since the end of the Second World War.

Countries have until the end of March to decide whether to seek membership of the AIIB. As well as the UK, Germany and France, other US allies backing the venture include New Zealand and Italy.

Lagarde, speaking at the opening of the China Development Forum in Beijing, said she believed that the World Bank would co-operate with the AIIB given time.

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