AIIB unlikely to lend any support to North Korea

Posted on : 2016-06-28 17:37 KST Modified on : 2019-10-19 20:29 KST
As of now, North Korea is not a member state and will probably not fulfill membership requirements
Officials from Asian Infrastructure Investment Bank member countries pose for a commemorative photo at the bank’s first annual conference in Beijing
Officials from Asian Infrastructure Investment Bank member countries pose for a commemorative photo at the bank’s first annual conference in Beijing

The Asian Infrastructure Investment Bank (AIIB) is almost certain not to invest in North Korea-related projects for the time being, it has been confirmed.

Speaking at a press conference on June 25 for the bank’s annual conference in Beijing, the Chinese-led, multilateral development bank’s president Jin Liqun fielded a question on its plans to invest in or support projects in non-member states like North Korea.

“In terms of projects for non-member states, they can receive investment once they become member states,” he replied.

While something of a generality, his remarks would suggest no route for North Korea to receive AIIB assistance as a non-member. The bank currently limits membership application eligibility to International Bank for Reconstruction and Development (IBRD) and Asian Development Bank (ADB) members. While it is taking new applications through September, the prospects of North Korea joining as a non-member of both are likely.

 June 25. (Xinhua/Yonhap News)
June 25. (Xinhua/Yonhap News)

Jin also showed a subtle change in position toward North Korea. As recently as his Sept. 2015 South Korea visit as AIIB president-designate, Jin voiced a positive stance on the matter.

“North Korea is a country that the Investment Bank very much wants to help, and we hope it can join as a member of a multilateral development organization,” he said at the time.

In contrast, Jin avoided any mention of North Korea at all in his June 25 remarks. When asked whether it would be included as an observer, he answered, “Go look at the countries that wanted to get in and couldn’t.”

While 24 non-members were invited to attend the AIIB conference as observers, North Korea was not among them.

“Twenty-eight countries that hope to join and cooperating international bodies were invited as observers, and a portion of them attended,” explained a foreign affairs source in Beijing.

“North Korea wasn’t one of the 28, so it was never even invited,” the source said.

Jin’s announcement that the AIIB would not be supporting non-members runs somewhat counter to its own regulations. The bank’s founding agreement states that support can be provided for non-member projects with special approval by the conference: two-thirds approval with three-quarters of members attending. Under the circumstances, Jin may have felt uncomfortable discussing exceptional cases of support for non-member states in front of the bank’s founding members and prospective members (observers).

Another possibility is that he judged any mention of the matter premature.

“The secretariat has a staff of about 40 people right now, and everything is at such a basic stage that people have complained about going too quickly with the projects that were recently approved,” explained a South Korean government source.

“The first thing that’s needed is stability for the organization,” the source added.

The AIIB board approved four loan efforts the conference on June 24, including providing lone assistance on a power supply servicing project in Bangladesh.

Observers have previously offered support for highway and other infrastructure through a multilateral development bank as a way of encouraging openness and change from North Korea. During a Mar. 2014 speech in Dresden, South Korean President Park Geun-hye proposed a “Northeast Asian development bank” as a way of supporting economic development in North Korea, although the idea has been all but abandoned since then.

By Kim Oi-hyun, Beijing correspondent

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