Switzerland, Luxembourg plan to join China-led development bank

SHANGHAI, China – Switzerland and Luxembourg are planning to join the Beijing-backed development bank AIIB, China’s finance ministry said, the latest European nations to sign up to the multilateral lender which has drawn scepticism from the United States.

Britain, France, Germany and Italy have already announced their intentions to join the Asian Infrastructure Investment Bank – which is viewed by some as a competitor to the World Bank and the Manila-based Asian Development Bank.

Switzerland will formally become a founding member of the bank later this month if approved by other members, China’s finance ministry said in a statement late Friday, March 20.

A separate ministry statement said Luxembourg had also applied.

China’s finance chief Lou Jiwei on Friday said the bank had 27 “prospective” founding members, the official Xinhua news agency reported, adding the application deadline is March 31.

The bank, which will support infrastructure projects in Asia, is expected to be set up before the end of this year, Xinhua said.

Head of the Organization for Economic Co-Operation and Development (OECD), Angel Gurria, on Friday welcomed participation in the bank by European countries.

“The fact that some of the European countries are now associating with the project makes me even more convinced that it is going to be run in a very professional, transparent way,” he said in Beijing.

But US officials have expressed caution amid worries the institution could undermine the World Bank.

US Treasury Secretary Jacob Lew has said Washington’s main concern was whether the bank would “adhere to the kind of high standards that the international financial institutions have developed”.

“Will it protect the rights of workers, the environment, will it deal with corruption issues appropriately?” he said. – Rappler.com