Just a few days shy of China’s end-of-March deadline for founding membership in the Asian Infrastructure Investment Bank (AIIB), Australia confirmed that it will join the AIIB.
Prime Minister Tony Abbott’s government announced over the weekend that it had chosen to sign on to join the bank as a founding member, becoming the latest U.S.-allied state to join an institution that some in the United States see as a competitor to U.S.-led international financial institutions, like the World Bank.
The Australian government will sign a memorandum of understanding to begin negotiations for participation in the AIIB, according to Australian media. Abbott noted that the MoU would “allow Australia to participate as a prospective founding member in negotiations to set up the bank.”Enjoying this article? Click here to subscribe for full access. Just $5 a month.
In the statement noting its decision to participate, Abbott, along with Foreign Minister Julie Bishop and Treasurer Joe Hockey, caveatted Australia’s participation by noting that Canberra recognized areas for improvement within the AIIB.
“Good progress has been made on the bank’s design, governance and transparency over the past few months, but we still have issues that we will address through ongoing consultations,” the three of them noted in a statement.
Though Australia’s eventual participation in the AIIB was widely suspected, the Abbott government emphasized a set of conditions governing its decision to join the bank as recently as last week.
“We have been talking to the Chinese to try to ensure that it is in fact a multilateral institution, that it is run in all important respects by a board, that its processes are transparent, that it is genuinely accountable and that it is not controlled by any one entity,” Abbott told the Australian parliament, recently according to the BBC.
Australia’s decision to join was likely abetted by similar verdicts on the bank by other Western states, including the United Kingdom, France, Germany, and Italy. Australia’s choice, according to Abbott, came after consultations with the United States and Japan.
With Australia’s participation in the bank, the United States’ appears to be increasingly isolated in its skepticism of the AIIB, with its allies flocking for early influence from within the burgeoning institution.
Japan remains the one notable ally to sit outside of the AIIB at this point, though Tokyo notes that it is actively studying the costs and benefits of participation in the institution.
At this point, however, with two days left before the deadline for founding membership, it is likely that Tokyo’s participation, if it occurs at all, would come at a later date in the form of common membership.
Japan’s regional financial institution of choice is the Asian Development Bank (ADB) where it, along with the United States, enjoys considerable influence. With the AIIB, Japan has expressed some solidarity with the United States’ view of the bank’s governance and transparency standards.