Japan expected to join as ordinary member later
China has finalized the list of prospective founding members of the Asian Infrastructure Investment Bank (AIIB), the country's Ministry of Finance said on Wednesday.
The China-led AIIB now has 57 economies that have signed up to be founding members, with the right to shape the development bank's rules.
The list of founding members includes 13 of the G20 nations and all 10 ASEAN members.
The final list is bigger than previously anticipated as seven more countries - Israel, South Africa, Azerbaijan, Iceland, Portugal, Sweden and Poland - joined the bank at the last minute.
The US and Japan have remained absent, but analysts said that Japan may yet join the bank as well.
"Japan will surely join the AIIB as an ordinary member, as the country plays an important role in Asian economic development and the bank can bring new momentum for Japan's tepid economy," Chen Fengying, a research fellow with the China Institutes of Contemporary International Relations, told the Global Times Wednesday.
Japan will decide whether to join the AIIB by late June, Tokyo-based Kyodo News reported earlier this month.
With the list of founding members finalized, attention is now centered on the shareholding structure for member economies and the governance rules of the bank.
The AIIB should and probably will adopt a more flexible structure for shareholding than other international development banks such as the World Bank, analysts said.
"The AIIB should be flexible enough to take the economic development of different countries into consideration. If so, this will set a good example for other international organizations and lead to reforms at the World Bank, the IMF and the Asian Development Bank (ADB), which do not allow for the initial shareholding to be changed," Liu Li-gang, chief economist with ANZ Bank, told the Global Times on Wednesday.
"If India's economy becomes bigger than China's, India should be able hold a larger stake in the bank in the future," Liu said.
A flexible structure could trigger reforms at other international organizations but competition between them is unlikely, as they have different goals, both Liu and Chen said.
"The AIIB will be complementary to the ADB in terms of infrastructure construction financing," which will enable the ADB to devote more attention to developing other sectors such as education, medicine and environmental protection, Chen noted.
Once established, the bank, which will finance infrastructure across Asia, could offer loans worth $30 billion every year, Liu estimated. The infrastructure investment needed in Asia-Pacific is estimated to be around $8 trillion from 2010-20, according to ANZ Bank.
While the AIIB aims to improve infrastructure, generating a profit from its investments and coordinating relations among the member economies will be the top priorities, said Chen.
With regards to shareholding, observers have speculated that Asian economies would hold a 75 percent stake at the beginning, which would result in China having a 28 percent shareholding, according to Liu.
The shareholding structure will be decided by the end of June, according to China's Vice Finance Minister Shi Yaobin on Wednesday.
The AIIB, which was initiated by Chinese President Xi Jinping in 2013 to help finance infrastructure projects in Asia, is expected to be officially established by the end of this year.
While the list of founding members is set, the bank will be open to accepting more economies as ordinary members, Shi said. Ordinary members will have voting rights but less say in setting rules.
