AIIB urged to give ‘special care’ to poor countries

KATHMANDU, AUG 13 -

Nepal has asked that “special care” be given to the investment needs in the infrastructure sector of poor countries by the proposed Asian Infrastructure Investment Bank (AIIB), said a Nepali delegation currently visiting China.

The team led by Finance Minister Ram Sharan Mahat also informed the Chinese authorities that Nepal would be joining the China-sponsored bank as founding member.

A technical team headed by the joint secretary of the Finance Ministry Madhu Marasini participated in the technical discussion related to the bank’s establishment. “During the consultation, we asked that priority be given to poor countries like Nepal,” said Marasini upon his return to Nepal on Tuesday.

According to Marasini, 20 Asian countries participated in the fourth round of consultations, and it was agreed that the next round of meetings would be held at the end of September to finalize the number of founding members, share holdings and portion of resources to be invested by each founding member.

The signing of the memorandum of understanding on the establishment of the AIIB has been scheduled for October. The bank is slated to start operations in 2015. The bank’s paid-up capital is expected to be $ 50 billion and the authorized capital $ 100 billion.

Nepali officials believe that the establishment of the AIIB will open new avenues for financing for the country’s poor infrastructure sector.

The Nepali delegation also met with Chinese Finance Minister Lou Jiwei and Commerce Minister Gao Hucheng in Beijing. During the meeting, the two sides agreed to reactivate the finance secretary-level Economic and Technical Committee whose meeting has not taken place since 2007.

“The two sides agreed to discuss pending issues and concerns regarding bilateral trade and investment through this mechanism which should meet every year in the two countries alternately,” said Marasini.

According to Marasini, the finance minister asked the Chinese finance and commerce ministers to provide easier access to the Chinese market given Nepal’s huge trade deficit with the northern neighbour.

The Nepali side also drew the attention of the Chinese authorities to the delay in implementing the 750 MW West Seti Hydropower Project and sought diplomatic intervention on the issue of a Chinese contractor not paying the guarantee amount after its contract was terminated.

“The Chinese ministers took up our issue and agreed to facilitate the investment by China Three Gorges Corporation that has signed an MoU with the Investment Board of Nepal to implement the project,” said Marasini. “Regarding Melamchi issue, they were positive regarding our concern, but said that it would be difficult to settle it at the government level since it had already gone to court.”

Source: The Kathmandu Post