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Russia’s membership in AIIB to strengthen Eurasian integration

April 15, 2015, 18:36 UTC+3 Zamyatina Tamara
© AP Photo/Kin Cheung

MOSCOW, April 15. /TASS/. Moscow’s decision to join the Asian Infrastructure Investment Bank (AIIB) amid Western anti-Russian financial sanctions will yield mutual benefits for the project’s participants and contribute to further Eurasian integration, experts polled by TASS said on Wednesday.

The AIIB is an international financial organization proposed by China in the autumn of 2014. The organization will focus on operations to stimulate financial cooperation in the Asia-Pacific region and finance infrastructural projects in Asia, from the construction of roads and airports to economy-class housing.

The bank will have an authorized capital of $100 billion. At a ceremony held in the bank’s headquarters in Beijing on October 24, 2014, a total of 21 countries joined the AIIB: China, India, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan and Vietnam.

Russia filed an application for joining the AIIB on March 30, 2015, a day before the deadline. China approved the application on April 14.

"Russia’s decision to join the AIIB is a correct decision meeting the national interests of the country and of all the states of the Asia-Pacific region," Director of the Strategic Analysis and Development Department at Vnesheconombank Vladimir Andrianov said.

"The AIIB is viewed as an alternative and a potential rival of the International Monetary Fund, the World Bank, the Asian Development Bank, the European and Latin American Development Banks, in which Washington plays a dominating role. It is not accidental that several European states, including the UK and Germany, have joined this project," the expert said.

"The fact that Russia has been among the last states to join the AIIB can be explained by purely bureaucratic discussions of the size of the bank’s authorized capital, which originally stood at $50 billion and was subsequently doubled," he said.

"The fears that China’s ambitious project of the third Great Silk Road made Moscow uneasy as a rival for the Baikal-Amur Main (BAM) Railway and the Trans-Siberian rail road are inconsistent because these transport arteries can be integrated with the AIIB’s support and become integral parts. The countries situated along the Silk Route can take joint efforts for building international transport corridors and gradually creating an infrastructure network that will link all the Asian regions, and also Asia, Europe and Africa," the export said.

"The main thing in this project is that Beijing is creating a financial structure designed to become a source of economic growth for the AIIB member states. At the same time, China is becoming a global power - a leading competitor of the US not only in terms of GDP but also in the financial sphere," Andrianov said.

"The AIIB is viewed in the world as a financial institution of China because precisely the People’s Republic of China is the basic and largest shareholder of the project and will determine this institution’s policy," former Russian Central Bank Chairman and now Chairman of the Vnesheconombank Supervisory Board Sergei Dubinin told TASS.

"The project was supported by over twenty countries, including the leading European economies, and so the bank has all the chances to turn into a serious source of investment. That is why, Russia’s decision to support the project was rational and expedient," the expert said.

"Russia’s participation in the AIIB will not be burdensome for the country’s budget as the share of the Russian Federation in the authorized capital is small but access to its resources will be beneficial for Russia, especially for developing the Far East," Dubinin said.

"But not only that. For example, if the AIIB invests in Vietnam’s infrastructural projects, Russia can act as the supplier of equipment for the Vietnamese construction industry and electric power engineering as the country is well familiar with this market. That is, the AIIB project is attractive as an instrument of developing international cooperation and trade. The main thing is that a decision to spend money should be economically substantiated for Russia," the expert said.

"For developed Western countries, the AIIB is attractive, first of all, by giving them a possibility to participate in quite profitable infrastructural projects in Asia where the fastest economic growth rates and the largest requirements for investments are registered," Deutsche Bank Chief Economist for Russia Dmitry Lisovolik told TASS.

"In a perspective, the Asia-Pacific region has the prospects of becoming the largest capital reservoir and forward-looking Western financiers cannot but take this fact into account," he added.

"On the other hand, European countries are interested in integration with the states of the Asia-Pacific region to attract large capital to developed states, which currently have problems with economic growth," the expert said.


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