BUENOS AIRES – Argentina has joined Bolivia, Brazil, Chile, Peru and Venezuela to become the sixth Latin American member of Asian Infrastructure Investment Bank (AIIB).
In need of further international financial assistance and under pressure after settling a debt crisis, President Mauricio Macri’s administration made this move to seek renewed channels for funding from the one-and-half-year-old multilateral financial institution.
The AIIB’s growth throughout Latin America shows the region’s close relations with Asia as well as a its intention to seek bilateral bonds, AIIB Vice President Sir Danny Alexander said on Friday at the second annual meeting of AIIB board of governors in Jeju, South Korea. “Latin American countries’ intention to take part in the AIIB reflects the fact that AIIB commitments are global,” he added.
Argentine President Mauricio Macri had already praised the AIIB during his China trip in May at the Belt and Road Forum for International Cooperation held, saying the bank serves as a good bond with China in pushing common development, enabling promotion of its infrastructure construction and exchanges.
Nadia Radulovich, co-founder of Asia Viewers consultancy, said, “AIIB can help Argentina, which is an emerging economy in need of massive investment, to sustain economic growth.”
Yang Zhimin, a researcher with the Research Institute of Latin America under the Chinese Academy of Social Sciences, said Argentina is under pressure to seek funding after settling a debt crisis. “Argentina fails to get what it wants from international financing after settling its debt crisis. The Macri administration has to seek various channels for funding,” Yang said.
The AIIB, being capable of both funding and prioritising infrastructure projects, is exactly what Argentina and many other Latin American countries urgently need in their efforts to upgrade infrastructure, according to Yang.
Poor infrastructure in Latin American countries has led to low trade facilitation and less favorable environment for both foreign trade and capital inflow, Yang noted, adding that an AIIB membership will help improve their trade and investment environment as well as international competitiveness.
Yang also believes that with the support from the AIIB, cooperation between China and Latin American countries will expand further and go deeper regarding the organisation and coordination of the various projects currently under way.
Latin American countries are showing growing interest in the China-proposed Belt and Road Initiative that seeks common development and prosperity by building infrastructure and trade networks, Yang said.