The US isn't a fan, but Ireland is joining a new Chinese-led investment bank anyway

IRELAND’S APPLICATION TO join the Chinese-led Asian Infrastructure Investment Bank (AIIB) has been approved as the government tries to strengthen links to Asia.

The move has come despite strong criticism of the AIIB from the US – which has already voiced its disapproval about the UK’s involvement in the organisation and put pressure on allies like Australia not to join.

First proposed by the Chinese government, the AIIB was formally launched towards the end of 2014 with a remit to support countries in the Asia-Pacific region in building important state infrastructure.

The capital of the bank is about $100 billion, about half that available to the World Bank, which also provides infrastructure loans to countries.

China is the largest stakeholder in the AIIB, with a stake of 30%, while India and Germany also have fairly significant shares.

Ireland accepted

Ireland’s desire to join the organisation has been well-flagged, with Finance Minister Michael Noonan meeting with AIIB president Jin Liqun at the start of the year to discuss the country’s membership.

The government said at the time that Ireland had applied for membership of the AIIB “to further strengthen our links to Asia and China in particular and to continue the significant role that Ireland has played over the years in development aid”.

Minister Noonan and AIIB president Jin

A spokesman for the Department of Finance confirmed that Ireland’s application to join the AIIB has now been cleared.

“There is a process and legislation is required, but the main thing is that they have accepted us. We would hope to join by the end of the year,” he said.

In a statement, Michael Noonan said that he was pleased Ireland’s application was approved, and added: “The AIIB will play an important role in fostering sustainable economic growth and prosperity in Asia.”

China and US

Set up in the 1940s, the World Bank is based in Washington and has traditionally had a strong US and UK influence.

The establishment of the AIIB was widely seen as an attempt to counterbalance the influence of the World Bank and other US-based international financial institutions.

Some 57 countries were founding members of the AIIB, including the UK. The UK’s involvement in the project led to the US accusing it of “constant accommodation” of China.

The rebuke was notable as it was a rare high-profile instance of friction between the two Western nations, which have enjoyed a ‘special relationship’ for decades.

It was reported that the US put pressure on Australia and South Korea not to join the AIIB, however the two nations also became part of the organisation. The US and Japan are the two most significant economies yet to join the Asian investment bank.

The Financial Times reports that Canada, Ethiopia and Sudan are thought to be among the 25 countries expected to join the AIIB this year.

Although some critics feared that the AIIB would be used to advance China’s national interests, a report from Forbes analysing its first year of operations found that the AIIB has been transparent in its dealings and does not appear to be biased towards Asia’s most influential state.

This article was updated to include quotes from Michael Noonan