S. Korea about to make sharp turns in AIIB entry

South Korea is about to make sharp turns in its decision on whether to enter China-proposed Asian Infrastructure Investment Bank (AIIB) after major European countries announced intentions to join the international body to fund infrastructure development in Asia.

In the past two days through Thursday, multiple South Korean media depicted the country's entry into the AIIB as a foregone conclusion. Donga Ilbo newspaper reported Thursday that the government already decided to join the 50-billion-U.S. dollar bank as one of founding members. Munhwa Ilbo newspaper became the first local media on Wednesday by reporting that the AIIB entry is a foregone conclusion.

The Finance Ministry in charge of the country's AIIB entry is now working on conditions to join the AIIB, including how many shares it may get, a source with knowledge of the matter told Xinhua Thursday. The source declined to be identified because nothing has been fixed yet.

The presidential office denied media reports Wednesday, saying nothing has been decided yet "at the current stage," but lots of local media reported that the government would officially announce its decision to join the AIIB as late as next weekend before the deadline ends on March 31.

"Possibility for (South Korea's) entry into the AIIB is seen very high," Jee Mansoo, research fellow at Korea Institute of Finance (KIF), told Xinhua Thursday. "It is a matter of time. There is no reason not to enter the bank."

South Korea had initially declined to support the bank last year due to concerns over governance and operation, but those concerns were eliminated after Germany, France and Italy confirmed intentions to join the program in the wake of Britain's application.

"There had been worries among the United States and Japan about governance structure and way of operation of the AIIB. South Korea initially seemed sympathetic to the worries, but situations changed after European countries declared their entry," Jee said.

The researcher said Europe's entry into the program indicated South Korea is capable of discussing governance and operation of the AIIB along with European countries as well as China, giving more confidence to South Korea in the AIIB's transparency.

Joining the AIIB will be of great economic benefits to South Korea as its companies and banks will be allowed to participate in large-scale infrastructure development projects in Asia as a founding member of the bank.

"Builders will be allowed to take part in construction projects, and banks to join the funding process if South Korea enters the AIIB. Construction materials exports will rise. Those are all in South Korea's interests," said Jee.

"It would be an egregious error unless South Korea joins the AIIB," Kim Dongwon, visiting professor of economics at Korea University and research fellow of the Institute for the Future of State (IFS), told Xinhua. "Whether to enter the AIIB is a matter of national interests," said Kim.

Britain seemed to have decided to join the AIIB as the country wants to make London become an offshore center of the Chinese currency trading, according to Kim. In case of Germany, to which China is the fourth-largest export market, the European country cannot dismiss the China initiative given the deepening trade ties between the two countries.

"South Korea depends on China for about a quarter of its exports. The ASEAN member nations, which joined the AIIB already, account for some 14 percent of South Korea's total exports. How could South Korea snub the AIIB ? " the professor said.

The United States has sought to persuade regional allies such as South Korea and Australia to snub the AIIB. But, the U.S. lost "just and great cause" to maintain such persuasion after major European countries declare their entry, Kim said.

"The U.S. lost its just and great cause in the international society. China called for the IMF quota and governance reforms, but the U.S. dismissed the call. China proposed the AIIB as an alternative," said Kim.

Kim said there is no reason for South Korea not to join the AIIB except its relations with the United States, urging the South Korean government to pursue its national interests like the European countries.

Twenty-one countries, including China, India and Singapore, signed a memorandum of understanding in Beijing in October 2014 to build the AIIB. So far, at least 30 countries have applied to jointly establish the bank as founding members. The application deadline is on March 31.