World Bank Group, China-led AIIB agree to deepen cooperation

Tuesday, 25 April 2017 00:08 - - {{hitsCtrl.values.hits}}

World Bank Group President Jim Yong Kim (C), IMF Managing Director Christine Lagarde (R) and Indonesia’s Finance Minister Sri Mulyani Indrawati are seated prior to the start of the Development Committee Plenary, as part of the IMF and World Bank’s 2017 Annual Spring Meetings, in Washington, U.S. - REUTERS

Reuters - The World Bank Group and the China-led Asian Infrastructure Investment Bank said on Sunday they agreed to deepen their cooperation with a framework for knowledge sharing, staff exchanges, analytical work, development financing and country-level coordination.

The memorandum of understanding signed at the World Bank and International Monetary Fund spring meetings in Washington comes a year after the two multilateral lenders established mechanisms for cost-sharing and co-financing of investment projects.

Since then, the AIIB and the World Bank have co-financed five projects, supporting power generation in Pakistan, a natural gas pipeline in Azerbaijan, and projects in Indonesia to rebuild slums, improve dam safety and develop regional infrastructure.

They said in a joint statement that they are discussing more projects to be co-financed in 2017 and 2018.

“Signing this memorandum of understanding fits into our vision of a new kind of internationalism,” AIIB President Jin Liqun said in a statement. “It deepens our relationship with the World Bank Group and sets up the mechanisms through which we can more easily collaborate and share information.”

A World Bank spokeswoman said the knowledge-sharing memorandum was similar to one that was in place during the AIIB’s early development stages, but which ended when the Beijing-based institution was formally launched in January 2016.

She said the new agreement does not specify financing amounts or targets, adding that those will be determined through meetings and consultations to discuss the banks’ respective portfolios.

The AIIB has been viewed as a rival to the Western-dominated World Bank and Asian Development Bank. The United States initially opposed its creation and is not a member, but many U.S. allies, including Canada, Britain, Germany, Australia and South Korea have joined.

World Bank President Jim Yong Kim told Reuters on Thursday that he wants to push the Washington-based lender’s business model towards harnessing more private capital for development finance.

In a statement on Sunday, Kim said: “Collaboration between development institutions is essential to make the best use of scarce resources, crowd-in the private sector, and meet the rising aspirations of the people we serve.”