World Bank welcomes China's new bank as means to fight poverty

The World Bank plans to work together with the Chinese-led Asian Infrastructure Investment Bank to fight poverty and fund infrastructure projects, the World Bank president, Jim Yong Kim, has said.

Worried about China’s growing diplomatic clout, the United States has been urging countries to think twice about joining the AIIB, arguing that its projects may not adequately safeguard the environment and people.

But more than 50 countries including Britain, France and Germany have rushed to join China’s initiative, a $50bn (£34bn) multilateral infrastructure bank that will provide project loans to countries across Asia and plans to begin operations at the end of the year.

Kim said in a speech on Tuesday at the Washington-based Center for Strategic and International Studies: “With the right environment, labour and procurement standards, the AIIB and the New Development Bank, established by the Brics countries, have the potential to become great new forces in the economic development of poor countries and emerging markets.”

The Brics developing nations – Brazil, Russia, India, China and South Africa – are also working on a development institution, though they have run into disagreements over funding and management.

“If the World Bank Group, other multilateral banks, and these new development banks form alliances, work together and support development ... we all will benefit, especially the poor and most vulnerable,” said Kim, who was nominated to lead the World Bank by the United States.

Kim said he planned to meet Chinese officials next week during the spring meetings of the International Monetary Fund and the World Bank to discuss collaboration.

He suggested the World Bank and AIIB could co-finance individual infrastructure projects or work on regional integration, as developing countries face at least $1tn in infrastructure needs.

The United States has not joined the AIIB but has said it supports co-financing projects with it and existing institutions such as the World Bank and the Asian Development Bank to ensure appropriate safeguards are followed.

“I will do everything in my power to find innovative ways to work with these banks,” Kim said. “The decisions we make this year, and the alliances we form in the years ahead, will help determine whether we have a chance to reach our goal of ending extreme poverty in just 15 years.”