Together with 20 other countries, Singapore signed an intergovernmental Memorandum of Understanding (MoU) on 24 October 2014 to set up the Asian Infrastructure Investment Bank (AIIB).
Set to be headquartered in Beijing, the AIIB will be a multilateral financial institution focused on infrastructure development in Asia, according to Singapore's Ministry of Finance (MOF) press release.
After signing the MOU, the signatories will participate in the negotiations for AIIB's Articles of Agreement (AOA). Countries that subsequently sign and ratify the AOA will officially become founding members of the AIIB. The AOA negotiations are expected to be completed by end 2015, said MOF.
"The AIIB is a positive development which will help meet the immense infrastructure needs in Asia," said Singapore's Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam. " Singapore looks forward to partnering other members to establish the AIIB as a resilient multilateral institution, complementing and drawing on best practices of existing players like the World Bank and Asian Development Bank, so as to promote sustained growth in Asia."
The 20 other countries who signed the MoU include Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Lao PDR, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Sri Lanka, Thailand, Uzbekistan, and Vietnam.
Concerns about the AIIB
According to a Reuters' article, Indonesia, South Korea and Australia were absent from AIIB's MoU signing ceremony. The article attributed their absence to concerns about the AIIB, following U.S. Secretary of State John Kerry's comments on the financial institution.
U.S. State Department spokeswoman Jen Psaki told the media that while Secretary Kerry welcomes the idea of an infrastructure bank for Asia, he has "concerns about the ambiguous nature of AIIB's current proposal". "We strongly urge that it meets international standards of governance and transparency," she added.
Echoing this sentiment, South Korean Finance Minister Choi Kyung-hwan said that there's no reason for South Korea to not join it should AIIB be able to address its "governance and safeguard" concerns.
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