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By Yoon Ja-young
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| Strategy and Finance Minister Choi Kyung-hwan signs the Asian Infrastructure Investment Bank (AIIB) Articles of Agreement on behalf of the Korean government at a signing ceremony at the Great Hall of the People in Beijing, Monday. / Yonhap |
Strategy and Finance Minister Choi Kyung-hwan signed the AIIB Articles of Agreement with other founding member countries in Beijing, Monday, to launch the multilateral development bank aimed at promoting economic and social development in Asia and creating wealth by supporting the region with infrastructure investment.
According to the agreement signed by 57 founding members, the bank will have a paid-in capital of $20 bil. and total authorized capital of $100 bil.
Among the 37 Asian member countries, Korea is the fourth largest shareholder. Its stake is bigger than the stakes it has in the World Bank and Inter American Development Bank. It also succeeded in getting bigger stake than Australia or Indonesia, which have a similar gross domestic production (GDP). The stake means Korea will have a bigger voice in the bank's decision making.
China has the biggest stake of 30.34 percent, followed by India at 8.52 percent, Russia at 6.66 percent and Germany with 4.57 percent.
The government expects that the AIIB will expand infrastructure projects in Asia, providing good business opportunities for Korean firms.
"Asian infrastructure costs amount to over $700 bil. each year, but the infrastructure financing stands at below $300 bil." Choi said.
Despite being a traditional ally of the United States, Korea joined the bank which is regarded as a potential counterbalance to U.S.-influenced World Bank as it couldn't ignore its close economic relationship with China and the huge potential of the Asian infrastructure market. China aims at building a new Silk Road linking Southwest Asia, Central Asia and the Middle East to form an Asian economic community.
"Korean companies have world class capability in infrastructure, such as construction, transportation and telecommunications," the minister added.
As North Korea is not part of the Asia Development Bank or International Bank for Reconstruction and Development, it was barred from joining the AIIB. However, Choi said it is possible to support non-member countries with approval from AIIB. "There are diverse variables for North Korea, but if conditions meet, we have no reason to be reluctant about supporting North Korea through the AIIB. We will actively support it," he added.
