Egypt’s request to join the Asian Infrastructure Investment Bank (AIIB) was welcomed by China.
The final approval, however, will be determined by the bank’s 30 founding members. Egypt could join as a founding member by 14 April, state-run newspaper Al-Ahram reported Wednesday.
“I believe that there is a big chance for Egypt to become one of the founding members at AIIB, as the country has been developing good relations with a number of the current members through improving trade and economic relations with them. Thus, I expect them to approve Egypt’s membership,” said Fakhry Elfiky, Cairo University professor and former assistant to the executive director of the International Monetary Fund (IMF).
If Egypt were to become a member, it will be of great benefit, as one of the country’s main needs is infrastructure development. This will require billions of dollars in investments. By joining the bank, Egypt will receive concessional loans and investments in this particular much needed area, Elfiky pointed out.
Each member country will participate in capital depending on the size of its economy. Since Egypt is currently in need of loans and investments, its participation will be low, leading the country to acquire a very small share, Elfiky added.
Various media outlets have argued that the AIIB is considered a main rival to the World Bank, and that the US is not pleased with the idea of the new bank.
To date, the US has not requested membership in the bank.
“The US wants to be the hegemonic power over the international economy, as it is currently dominant with its 17% share in the World Bank, whereby China wants to rule the world,” Elfiky further noted.
The main purpose of the bank, as its name stands, is that it will provide loans and investments in infrastructure to underdeveloped Asian countries. According to Elfiky: “Member countries will benefit by receiving infrastructure investments from the AIIB.”
“The AIIB’s establishment started with the participation of about 20 countries now they’ve reached over 40,” Elfiky said. Some of the applicants included India, United Kingdom, Italy, Germany, France, Russia, Brazil, Austria and many others.
Initial capital for the bank is to reach $50bn, where this amount is planned to be doubled in the future.