The Borneo Post

Australia ready to join China-led bank, seeks clarity on governance

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SYDNEY: Australia is ‘well and truly’ disposed to join the Chinaled Asian Infrastruc­ture Investment Bank (AIIB), Prime Minister Tony Abbott said on yesterday, but wants to know how much power Bejing would hold in the institutio­n before a formal decision.

Fairfax Media citing government sources, reported the federal cabinet has approved Australia signing a ‘memorandum of understand­ing’ on joining the AIIB.

Australia, South Korea and Japan are the notable regional absentees from the bank, which the United States had warned against.

Despite Washington’s misgivings, US allies Britain, France, Germany and Italy announced this month they would join the bank, leading the Obama administra­tion to reassess its stance.

China’s Xinhua news agency has said Beijing will not hold any power of veto in the bank.

The AIIB has been seen as a significan­t and possibly historic setback to US efforts to extend its inf luence in the Asia Pacific region to balance China’s growing financial clout and assertiven­ess.

Although Australia is a vital part of Washington’s strategic ‘pivot’ toward Asia, it is close to joining as well.

“We are certainly well and truly disposed to joining something which is in fact a genuinely multilater­al institutio­n with transparen­t governance, clear accountabi­lity and with major decisions made by the board,” Abbott told reporters.

“That is really the fundamenta­l thing for us, would major decisions be made by the board and is it going to be a multilater­al institutio­n rather than one that is controlled by any one country,” he said at a news conference in Canberra.

Japan, however, is cautious about joining while South Korea has said it is yet to decide.

Tokyo ‘does not need to sign in’ on joining the bank unless China lays out clear rules on when and what conditions it will provide loans, Finance Minister Taro Aso said on Tuesday.

Abbott said he has discussed the matter with US President Barack Obama and Japan’s Prime Minister Shinzo Abe and would continue talking to them.

Speaking to the Australia China Business Council, Treasurer Joe Hockey said it was important to secure the country’s best interest in a well governed bank that will work to promote greater infrastruc­ture and growth in the region.

“If well designed, the AIIB could play a key role in helping to address the region’s acute infrastruc­ture needs. In order to do this we will need a strong and well governed AIIB,” he said.

“It is early days for the AIIB, but China has made strong progress on governance so far. The proposed governance arrangemen­ts will be modelled on internatio­nal best practice.” — Reuters

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