AFP
The head of the Asian Development Bank said yesterday he is ready to work with China on a new infrastructure investment bank proposed by Beijing, despite fears it could undermine his institution.
The Manila-based ADB is too large and established to be threatened by the proposed lender, Takehiko Nakao told a foreign correspondents’ forum in the Philippines.
“If the AIIB (Asian Infrastructure Investment Bank) is established, we are very happy to have the appropriate collaboration,” Nakao said, adding the banks could potentially co-finance projects.
Last month China and 20 other Asian countries signed a memorandum of understanding to establish the AIIB, an institution whose development has been driven by China and which will be based in Beijing, according to the Chinese state news agency Xinhua.
However the proposed lender is seen as a potential rival to existing Western- and Japanese-dominated institutions such as the World Bank and the ADB.
The Japanese government has expressed concern, while the US is reportedly fiercely opposed to the AIIB, which some analysts see as a venue to expand Chinese influence at their expense.
Nakao stressed there had been “no contact” yet between the ADB and the AIIB, although Chinese officials had discussed the matter with him when he was in Beijing.
He added that it was “understandable” that Asian countries would want such an institution because of the region’s huge need for infrastructure financing.
He said Asia needed $800bn a year in funding for infrastructure, particularly for energy and ports. Of the 20 other countries that signed the AIIB memorandum, only India and Singapore are considered large economies.
However Nakao stressed that the ADB had always been active in infrastructure, even as it also supports social services as part of its mission of poverty-reduction.
“The ADB’s focus has always been infrastructure,” he said.
“China has always been very supportive of the ADB so Chinese authorities have been saying (the AIIB) will be complementing and supporting the work of the ADB instead of challenging and going to be a rival,” he added.
“There is no real issue about it. We can work with the Chinese authorities and the new bank if they do regional co-operation,” he said.
Despite its rapid economic growth, China still needed the ADB’s help in areas such as environmental protection, he said.
ADB officials later told AFP the lender was supporting a project to revive an overland “silk road” between China and Europe via Central Asia and the southern Caucasus in support of regional co-operation.
China is also proposing a “maritime silk road” link to Europe that goes through Southeast Asia and Indian Ocean states.