Finland to join the prospective founders of the Asian Infrastructure Investment Bank
Finland intends to join the agreement negotiations for the founding of the Asian Infrastructure Investment Bank (AIIB). The AIIB is a new, multi-lateral development bank that will focus on fostering infrastructure investments in Asia. Most of its capital will also come from Asia.
By announcing its participation in the agreement negotiations, the Finnish government has expressed its intent to join the prospective founding members of the Asian Infrastructure Investment Bank. The initiative for founding the AIIB came from China.
The Ministry of Finance sent a Letter of Endorsement concerning the matter to the AIIB secretariat on 27 March. As a prospective founding member, Finland will participate in the negotiations on the Articles of Agreement of the AIIB.
“Development in Asia is booming, and there is a huge demand for infrastructure investments. Finland’s aim is to ensure that the AIIB supports infrastructure development on the continent in a sustainable and environmentally friendly way,” says Minister of Finance Antti Rinne.
Participating in the talks is also justified from the perspective of Finland’s trade policy objectives. Growing infrastructure investments in emerging economies in Asia may translate into growing demand for Finland’s export industries. The focus areas of the AIIB will include energy, transport, telecommunications, water supply and environmental protection.
“The AIIB has the potential to provide significant input to economic growth in Asia. Many Finnish companies have special expertise in the focus areas selected for the AIIB. I hope that they will be able to utilise the forthcoming opportunities,” says Rinne.
Major shareholder is China
Last autumn, a group of Asian governments reached a Memorandum of Understanding for the start of intergovernmental talks leading to the founding of the AIIB. However, the AIIB is open to all countries: other countries may be admitted to the agreement negotiations and thus become prospective founding members of the AIIB. Finland and several other EU Member States have expressed their intent to participate and hence to join the prospective founders of the AIIB.
Most of the capital of the AIIB will come from Asia, and China will be the major shareholder.
“For years now, China has been encouraged to take more responsibility for the development of international financing institutions because of the country’s growth in economic importance. Now China has taken up the challenge, and Finland wishes to support this endeavour,” says Rinne.
The negotiations on the Articles of Agreement are intended to be concluded by the end of this year. Finland’s contribution to the bank’s capital will be determined in the course of these negotiations.
Finland will ultimately decide on joining the AIIB through the process for the ratification of international conventions once the treaty establishing the AIIB has been finalised.