Maldives becomes founding member of Asian infrastructure bank

The Maldives signed articles of agreement today to establish the China-led Asian Infrastructure Investment Bank (AIIB) as one of 57 prospective founding members.

Finance minister Abdulla Jihad signed the agreement at a ceremony held this morning at the Great Hall of the People in Beijing.

The AIIB was created in October to fund Asian energy, transport and infrastructure projects and rival the Western-dominated World Bank and Asian Development Bank.

Following the signing ceremony, Maldives ambassador to China Mohamed Faisal said the bank will become “an important global financial institution.”

Arif Hilmy, an advisor to the finance minister, will reportedly represent the Maldives on the bank’s board.

Representatives from 50 of the 57 founding members also signed articles of agreement today, which determines each members’ share and contribution to capital.

The UK, France, Germany, Norway, Russia, Australia, South Korea, Singapore, Saudi Arabia, India, Indonesia, and Brazil are among AIIB founding members, but Japan and the US are opposed to the bank.

The US had questioned standards at the new institution and tried to dissuade allies from joining.

The bank is due to begin operations later this year with a capital of US$100 billion. With 30.4 percent, China is the largest shareholder, followed by India (15 percent) and Russia (6.5 percent).

China also has effective veto power over the bank’s decisions with its more than 25 percent voting share.

During a recent visit to China, President Abdulla Yameen said Sino-Maldives bilateral relations are at an “all-time high” with the establishment of a cooperative partnership between the countries last year.


Maldives backs new Chinese investment bank, pursues free trade deal

The Maldives is to back a Chinese-initiated international finance institution to be called the Asian Infrastructure Investment Bank (AIIB) while ministers have confirmed a free trade agreement is being pursued.

At a press conference today, the economic council revealed that the Maldives had asked to be included as a founding member of the proposed bank alongside the existing 21 countries, which includes both China and India.

Minister of Fisheries and Agriculture Dr Mohamed Shainee also revealed that China was to become the Maldives first free trade partner, demonstrating the pair’s excellent bilateral relations.

The requests were put forward during a recent visit to China by the Economic Council where discussions were held on proceeding with Chinese-assisted projects, while the Maldives officially signed up to the Maritime Silk Road project.

The AIIB, which is to start up with a proposed US$100 billion capital, is purposed with financing infrastructure projects in the Asia Pacific region.

The bank has been described by some media outlets as having been set up with the intentions of increasing Chinese influence in Asia at the expense of the IMF, ADB, and the World Bank.

The economic council today confirmed that the Maldives has officially agreed to participate in China’s silk road trade route – the third country to do so, although Chinese state media has reported more than 50 states as expressing interest.

The two countries have also agreed to engage upon free trade in the future, explained the council.

“The biggest advantage of the free trade will go towards fishermen. With free trade and the 12 percent export duty will be gone, thus the 12 percent becomes profit for fishermen,” said Shainee.

When questioned about the potential economic disadvantages which might occur because of a free trade agreement, Minister at the President’s office Mohamed Shareef said that both governments will make sure that the agreement leads to a ‘win-win’ for the countries.

“I want to mention that the free trade talks were initiated by the Maldives,” said Shareef. “China is willing to give us a lot of leeway into how we structure the agreement.”

Shareef also said – citing Chinese sources – that the Maldives is the number one South Asian destination for Chinese tourists at the moment. Chinese tourists currently make up around one third of all tourist arrivals to the Maldives.

The economic council also stated that work on the proposed new terminal at Ibrahim Nasir International Airport (INIA) is to begin in the next six to seven months and that the request for the loan to finance the project has been submitted to the Chinese Exim bank.

The council members also reiterated the importance of the proposed Malé-Hulhulé Bridge, saying that there is good progress and that the government is aiming to open it by the year 2017.

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