Dozens of files are to be presented to Cabinet on Tuesday as Government business winds down for Christmas. Among them is a request from Minister for Finance Michael Noonan for approval to seek membership of the Asian Infrastructure Investment Bank (AIIB). What is this?
The AIIB is China’s nascent development bank, a multilateral institution set up by Beijing as an alternative, ie rival, to the Washington-based World Bank. The US opposed the notion, but American allies such as Britain, Germany, Italy, France, Australia, the Philippines and South Korea are all joining.
The AIIB – not to be confused with Ireland’s AIB – expects to begin operations in 2016. The body denies it will be an instrument of raw Chinese power, insisting it will be “clean, lean, green” and faster than rival lenders. Whatever about that, it expects to lend $10-$15 billion (€9-€13.6 billion) a year in its first five or six years in transport, energy and telecoms projects in Asia.
The prospect of Irish membership follows expressions of interest from Taoiseach Enda Kenny and Mr Noonan at meetings with their Chinese counterparts earlier this year. Full membership would cost about €48.4 million, built up via five annual exchequer payments of some €9.7 million. The case for joining is based in the main on geopolitical and economic considerations, including trade ties with China and the wider Asian economy.
The logic is clear for Ireland, which has already made heavy diplomatic investments in the trading relationship with China, now the world’s second-biggest economy. Joining alongside other European countries would be seen as an extension of this effort – and a necessary one too if this is where Beijing’s focus is trained. But none of that should take from the requirement for transparency at the AIIB and the highest environmental standards, never a forte in the singular Chinese milieu.
Ireland’s entry is not a done deal. Approval to negotiate membership would be followed by a formal application to join, and domestic legislation to facilitate participation. One for the next government, ultimately.
