Proposed bank will benefit NZ: English
Finance Minister Bill English says New Zealand and Singapore have been at the forefront of negotiations with the Chinese Government over the governance of the proposed Asia Infrastructure Investment Bank (AIIB).
Former Treasury Secretary John Whitehead has been conducting the negotiations on New Zealand’s behalf, he said.
“It’s one of these things where New Zealand and Singapore have a comparative advantage as internationally accepted honest brokers negotiating on behalf of a broader range of countries,” English told the Herald in his first interview on the bank.
About 20 countries indicated initial interest in the bank last year, including New Zealand.
When last Tuesday’s deadline passed to apply to become a founding member, 46 countries applied, including Australia and South Korea which had previously been sceptical.
Others include Germany, France, Britain, Brazil, Russia, and Sweden.
The United States, which opposed the bank, and Japan have not signed up.
“Early on, Australia indicated it would not participate at a time when we did step up,” English said. “As it has become a more attractive option, the Australians have become interested again.
“There are a number of other countries who think this now could be a genuine multilateral institution and therefore they see it could be a positive vehicle for investment in a region that is pretty critical to growth for most developed countries.”
English said New Zealand did not want to see the bank completely controlled by the Chinese Government so began talks on governance.
“We got involved early because we saw an opportunity to influence the way the organisation is set up,” he
We got involved early
because we saw an opportunity to influence the way the organisation
is set up. Bill English, Finance Minister
said. “We want to see a genuine multilateral organisation where there are influences alongside the Chinese Government.”
He would not comment on the substance of the negotiations and exactly what the governance structure would look like.
Prime Minister John Key last year indicated that New Zealand’s initial capital contribution could be about $100 million — part of an initial subscribed capital value of US$50 billion.
With more countries with high GDPs looking likely to join, there is likely to be a recalculation of shares.
English said it was important to remember that a satisfactory governance structure needed to be completed before a capital contribution was finalised.
The US warned against joining the bank, suggesting it would compete with the World Bank and the Asia Development Bank.
Treasury Secretary Jack Lew last week softened the US stance after a visit to China, saying he hoped it would work with the World Bank and Asia Development Bank, but that has been widely seen as a position the US has been forced to take after such wide sign-up.
Asked if the US had put pressure on New Zealand not to join, English said “not particularly”.
“There has been more public discussion between the US and Australia than there has been with us. We have got a bit more of an ‘honest broker’ role.”
He said the more infrastructure investment that the bank would bring would benefit the region and New Zealand.
“It is just our long-term strategic interest is a thriving Asia Pacific region and, alongside that, an opportunity to expand the market for New Zealand’s infrastructure services.” There were a number of New Zealand companies that had been successful in World Bank projects and commercial projects.
“And the more of it that is going on in the Asia Pacific, the better from our point of view.”