Washington - The World Bank plans to work together with the China-led Asian Infrastructure Investment Bank in order to fight poverty and fund infrastructure projects, World Bank President Jim Yong Kim said on Tuesday.
Worried about China's growing diplomatic clout, the United States has been urging countries to think twice about joining the AIIB, arguing that its projects may not adequately safeguard the environment and people.
But more than 50 countries, including US European allies Britain, France and Germany, have rushed to join China's initiative, a $50 billion multilateral infrastructure bank that will provide project loans to countries across Asia and plans to begin operations at the end of the year.
“With the right environment, labour and procurement standards, the AIIB and the New Development Bank, established by the BRICS countries, have the potential to become great new forces in the economic development of poor countries and emerging markets,” Kim said in a speech at the Washington-based Centre for Strategic and International Studies.
The BRICS developing nations - Brazil, Russia, India, China and South Africa - are also working on a development institution though they have run into disagreements over funding and management.
“If the World Bank Group, other multilateral banks, and these new development banks form alliances, work together, and support development... we all will benefit, especially the poor and most vulnerable,” said Kim, who was nominated to lead the World Bank by the United States.
Kim said he plans to meet with Chinese officials next week during the spring meetings of the IMF and World Bank to discuss collaboration.
He mentioned the World Bank and AIIB could co-finance individual infrastructure projects or work on regional integration, as developing countries face at least $1 trillion in infrastructure needs.
The United States has not joined the AIIB but has said it supports co-financing projects with it and existing institutions like the World Bank and the Asian Development Bank in order to ensure appropriate safeguards are followed.
“I will do everything in my power to find innovative ways to work with these banks,” Kim said. “The decisions we make this year, and the alliances we form in the years ahead, will help determine whether we have a chance to reach our goal of ending extreme poverty in just 15 years.”
Reuters