The new Asia Infrastructure Investment Bank (AIIB) is planning to invest $100 billion in infrastructure projects in Asia, half of which will be allocated by China.
More than 40 countries have already announced their intention to join the Bank, which is a Chinese initiative. They include Australia, South Korea, United Kingdom, France, Germany and Italy.
Japan and the United States have not joined for the time being.
A statement released on the Israeli foreign ministry website says Israel’s entry will open opportunities to integrate Israeli companies in infrastructure projects that will be funded by the new Bank.
Washington initially attempted to prevent its allies from joining the bank, which the U.S. sees as undermining the position of the World Bank and the Asian Development Bank. But Washington has had to change its tune after so many countries have joined.
U.S. Treasury Secretary Jack Lew said on Tuesday that Washington would welcome the establishment of AIIB, as long as it would be used to complement existing institutions and adopt high management standards.
The first news reports about the AIIB appeared in October 2013. The Chinese government had been frustrated with what it regarded as the slow pace of reforms and governance, and wanted greater input in global established institutions like the IMF, the World Bank and the Asian Development Bank, which China claims are dominated by American, European and Japanese interests.
An Asian Development Bank Institute 2010 report said that the region requires $8 trillion, to be invested from 2010 to 2020 in infrastructure, to facilitate continued economic development.
In June 2014, China proposed doubling the registered capital of the bank from $50 billion to $100 billion and invited India to participate in the founding of the new institution.
On October 24, 2014, a signing ceremony held in Beijing formally recognized the establishment of the bank. 21 countries signed the Memorandum of Understanding (MOU), including China, India, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan, and Vietnam.