Japan finance minister: ‘Desirable’ for AIIB, ADB to work together

World Today

Japan’s Finance Minister Taro Aso. (Photo: Thompson Reuters)

Japanese Finance Minister Taro Aso said on Tuesday it would be desirable if the China-backed Asian Infrastructure Investment Bank (AIIB) could work with the Asian Development Bank (ADB) in meeting growing demand for infrastructure financing in Asia.

However, Aso, who last week gave cautious approval of the institution that Washington has warned against, said Japan was not ready to decide to join the Beijing-based bank by a March 31 deadline, citing lack of transparency in the bank’s management.

At least 35 countries will join the AIIB by the deadline, the bank’s interim chief announced on Sunday. It has been seen as a challenge to the World Bank and the ADB, institutions the U.S. helped found and over which it exerts considerable influence.

The problems are “that the AIIB is not transparent and nothing has been decided as to who is (involved), where to decide an executive board and who will examine” loans for each project, Aso said.

“It would be the most desirable that it will work together with the ADB to develop infrastructure in Asia, but it is hard to see it happen as rules are totally different.”

Aso reiterated Japan’s concerns over the AIIB’s ability to sustain debt and respond to the environmental and social impacts of infrastructure development, which could affect existing loans by  the ADB, the World Bank, and other lenders.

Report by Reuters