Switzerland has become the 37th founding member of the newly created Asian Infrastructure Investment Bank (AIIB). The Chinese-led body will bankroll transport links and other large scale projects in the region.
Switzerland has pledged to underwrite $706.4 million ($691 million) of the bank’s capital, which aims to reach $100 billion once all contributions are in. China got the ball rolling with $50 billion in starting capital.
Having completed all the paperwork, Switzerland will now release the first of five instalments, this one worth $28.26 million. In addition, Switzerland has proposed cabinet ministers Johann Schneider-Ammann and Didier Burkhalter as the country’s AIIB Governor and Acting-Governor respectively.
Switzerland will vote in a bloc alongside Denmark, Iceland, Norway, Poland, Sweden and Britain. The vote is currently represented by Britain on the Board of Directors, but Switzerland hinted it would seek to nominate a replacement later this year, “which would see it well placed to influence the ongoing institution building process.”
There are an estimated $2 trillion of unmet infrastructure needs in Asia. The AIIB has been dubbed a rival to the World Bank and the International Monetary Fund (IMF), which are dominated by the United States.
The creation of the AIIB has met with some criticism in the US for allowing China to gain a more dominant hand in the region. China had long complained at limits on its voting rights at the World Bank and IMF.
But Switzerland welcomed the move, saying in March of last year that it wanted to be “well positioned in the new institution from the outset.” Switzerland also sees membership of the AIIB as a means of cementing its political and business interests in the region.