SEOUL-- A senior executive of a China-led infrastructure bank said Wednesday that the international lender will endorse new projects next month as it seeks to increase investment programs.
The Asian Infrastructure Investment Bank (AIIB) financed just over US$3 billion worth of projects in its first year and a half of operation. The multinational lender -- set up in 2015 to fund infrastructure projects in Asia -- also approved some more projects in September. India at the moment is the largest recipient of AIIB projects.
"We have a lot of projects in the pipeline around the region, and we'll have a board meeting next month where we'll approve further projects," Sir Danny Alexander, vice president and corporate secretary at AIIB, said in a meeting with a small group of reporters in central Seoul.
"We expect the investment program to increase markedly year-by-year, in terms of the number of projects, in terms of the number of countries that benefit from those projects."
The former Treasury chief secretary for Britain was in Seoul to attend a conference on the rules-based international system (RUBIS), the first such event held in East Asia. The conference brought together dozens of officials and experts from South Korea and the U.K. and other countries to exchange views and thinking regarding the role of the RUBIS system and its contribution to regional stability, security and economic growth.
Last week, British Prime Minister Theresa May said the rules-based system forged in the aftermath of World War II is in danger of being eroded, as some states are destabilizing the world order to their own ends.
Sir Danny said the AIIB intends to increase the amount of private-sector projects, noting the scale of the need for infrastructure investment around the region is much greater than the available resources from public funds.
"Mobilizing private capital is something that is very important to our bank," he said. "We are very much interested in private sector project sponsors bringing their ideas, bringing their projects to us, including Korean companies that are developing projects around the Asian region, and we'd be delighted to consider such ideas."
The AIIB has invested in a couple of equity funds: a Morgan Stanley fund focused on infrastructure in India specifically and one with the International Finance Corporation -- part of the World Bank group -- which is more broadly focused on emerging Asian economies.
The AIIB is widely viewed as a potential counterbalance to U.S.-led multilateral lenders, such as the Asian Development Bank (ADB), amid growing Chinese economic clout.
Still, he dismissed concerns that one country could exercise undue influence, noting that the bank has a high degree of transparency and the rules-based institution should be apolitical.
South Korea joined the AIIB as one of 57 founding members and its representative sits as one of the bank's 12 board of directors. The bank currently has 80 members, though the United States and Japan did not join.
Sir Danny said the door is open for other countries to join and said if Japan wanted to join the bank, "the door is open, they'd be very welcome."
He said the bank views South Korea as a very important member and Koreans have a lot of involvement and influence.
South Korea's dramatic progress since the 1950-53 Korean War is a "great example, if you like, on what can be achieved through sustained investment and focus," he said.
South Korea has become a donor country from being a recipient of U.N. aid in half a century, a transformation that has inspired many developing nations to follow in the footsteps of the Asian country in advancing their economies.
The vice president said it's much more likely that the AIIB will invest in projects that are being delivered or supported by South Korean companies in other parts of Asia, noting South Korea has many strong and successful infrastructure companies.
He said the bank has no plans to invest in North Korea at the moment as the communist country is not a AIIB member and the lender invests in its member countries.
"There's absolutely no plan to do that at this stage," he said.
North Korea is not entitled to apply to join the AIIB as Pyongyang is not a member of either the World Bank or the ADB, a key requirement for becoming a member.
He said there are special rules that could allow the AIIB to invest in nonmember countries, but it requires a very high standard of agreement among the finance ministers of member states.
Source: Yonhap News Agency