Cabinet agrees to B9.5bn AIIB start-up contribution

Cabinet agrees to B9.5bn AIIB start-up contribution

A new bridge linking Chiang Lap, Myanmar and Luang Namtha, Laos (shown here under construction) opened on Saturday. The AIIB aims to provide finance to such projects in the Asian region. TAWATCHAI KEMGUMNERD
A new bridge linking Chiang Lap, Myanmar and Luang Namtha, Laos (shown here under construction) opened on Saturday. The AIIB aims to provide finance to such projects in the Asian region. TAWATCHAI KEMGUMNERD

The cabinet recently approved in principle for Thailand to contribute a total 9.5 billion baht to the Chinese-initiated Asian Infrastructure Investment Bank (AIIB) in five years.

Deputy Prime Minister MR Pridiyathorn Devakula said Thailand must allocate 1.9 billion baht a year from fiscal 2016-20 to the AIIB as its start-up capital.

Thailand needs to confirm the joint investment because the fourth chief negotiators' meeting on establishing the AIIB held in Beijing late last month requires all 57 members to settle investment this month.

The next meeting will be held in Singapore from May 20-22.

Founding members are expected to sign an agreement for joint investment between June and December, while the AIIB is expected to be officially launched between the end of this year and early 2016.

Thailand joined 20 prospective founding member countries in establishing the AIIB last October.

The AIIB is the first Asia-based international bank to be independent from the Western-dominated International Monetary Fund and World Bank.

The bank was first announced by President Xi Jinping and Premier Li Keqiang during visits to Southeast Asia in October 2013 as part of efforts by China to boost its regional clout.

The bank would have start-up capital of US$50 billion, with half contributed by China and half by other countries.

After the figure for working capital is reached and paid by member countries according to their financial capability, China proposes doubling the capital of the bank to $100 billion.

As of April 15, the number of prospective founding members had reached 57, with Sweden, Israel, South Africa, Azerbaijan, Iceland, Portugal and Poland the latest to be included.

Countries accepted as AIIB founding members include China, India, Malaysia, Indonesia, Singapore, Saudi Arabia, Brunei, Myanmar, the Philippines, Pakistan, Britain, Australia, Brazil, France, Germany and Spain.

Founding members have priority over nations that sign up later because they will have the right to set the rules for the bank.

Thailand's military-installed administration backed China's bank plan from the outset and gave the green light for Thailand to join the AIIB last July.

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