Fifty countries sign on with new China-led development bank
- Fifty countries, including 10 from the Middle East, have signed the articles of the newly established Asian Infrastructure Investment Bank (AIIB)
- Bank will have an initial capital of $50bn, to be increased to $100bn
- China holds the largest share, giving it veto power over AIIBs activities
Ten Middle Eastern countries, including Saudi Arabia and the UAE, were among the fifty signatories to the Asian Infrastructure Investment Bank (AIIB) articles to determine each members shareholding and capital.
China is reportedly to hold the largest share, at about 26 per cent, giving it a veto over the banks activities.
Asian countries will hold 75 per cent of shares, most importantly India and Russia.
China will contribute about 30 per cent of AIIBs initial capital of $50bn, which will eventually be raised to $100bn.
AIIB will focus on infrastructure in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics.
This agreement is crucial in paving the way for accelerating economic development across Asia, said UAE Minister of State Sultan Ahmed al-Jaber in a press release. In addition to enhancing the countrys role within the global economy, the UAEs affiliation to the institution as a founding member will support the countrys growing interests in Asia.
The bank is expected to start operations by the end of 2015.
Seven more countries are due to join AIIB later in the year.
However, the US and Japan have refused to join, seeing the bank as a Chinese challenge to the development funds they dominate the World Bank and the Asian Development Bank respectively.
The participation of major world economies such as India, Russia and Brazil, as well as Western European countries, is seen as a huge success for Chinese foreign policy. Control of the bank will allow the worlds second-largest economy to take a more active role in Asia.
Middle Eastern signatories
- Saudi Arabia
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