Laos hopeful of support from new Asian bank
Laos hopeful of support from new Asian bank
Once the Asian Infrastructure Investment Bank (AIIB) is established in 2015, the main benefit for Laos is that infrastructure development will be faster and more comprehensive.
“There will be more funding from the AIIB to support and promote loans for development,” said Bank of the Lao PDR (BOL) Deputy Governor, Mr Sonexay Sithphaxay.
AIIB, a new international financial organisation led by China, will be established in 2015 to accelerate infrastructure building in Asia.
A milestone agreement for the structure of the AIIB was reached, with 21 Asian countries, including India, stepping forward as founding members.
An intergovernmental memorandum of understanding was signed recently, opening the way for the formal establishment of the China-proposed financial body that will be tasked with providing funds for regional infrastructure projects.
The 21 economies are Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Uzbekistan, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.
Demand for investment to build infrastructure, such as railways and roads, in Asia through the end of 2020 will total an estimated 64,000 trillion kip (US$8 trillion), according to the Yomiuri Shimbun newspaper of Japan.
China has held many rounds of talks with interested countries on setting up the AIIB and achieving its reported capital target of US$100 billion, according to the China Daily.
Mr Sonexay said China has seen the importance in Asean of good infrastructure development, and the need for financing on a large scale.
“Many international organisations and financial institutions have worked hard to provide both financial and technical support in the past, but they have not been able to offer enough funding,” he said.
The bank will have similar responsibilities to other international banks, such as ADB and the World Bank. “But the AIIB will mainly focus on helping Asean countries,” he added.
The project means that each Asean country will be able to use funding or a loan from the bank for development expenditure. “Each country will also be a member of the bank and will be able to access financial resources, depending on the ability or capacity of that country,” Mr Sonexay said.
He explained that the bank will not encroach on the activities or responsibilities of other international banks as has been suggested, but will be a new promoter or supporter to help those international banks with the development process in Asean.
“Many international banks have encouraged other international organisations and financial institutions with substantial financial resources to assist them with development programmes,” he said.
“As we see, ADB and the World Bank have not been able to provide sufficient funding, and demand for the needs of development worldwide exceeds their capacity. So developing countries hope that more financial organisations or banks will come forward to help and support them.”
vientiane times
