(Transcript from World News Radio)
A list of 57 countries - including Australia - have been finalised - as founding members of a new multi-billion dollar investment bank.
The $130-billion Asia Infrastructure Investment Bank has been created to provide countries with loans to help fund major projects like roads, railways and telecommunications across the region.
It'll be led by China - and that represents some major challenges.
Ricardo Golcalves reports.
China is one of the world's biggest economies - in one of the world's fastest growing regions - which is demanding new infrastructure to promote productivity.
The Asian Development Bank estimates more than $10-trillion is total infrastructure investment is needed in the Asia Pacific region this decade.
By the end of 2025 - forecasters Oxford Economics say the region will constitute 60 per cent of global infrastructure investment - China alone one- third.
University of Melbourne international business expert - Helen Hu says - there is a shifting of global power.
"China is the second largest economy in the world, but its influence at international financial institutions is disproporitionate to its economic power."
Helen Hu adds that at the AIIB - China is expected to have a 30 per cent voting stake.
"Compared to other financial institutions China currently only has less than 5 per cent in IMF and World Bank and 5.5 per cent in the Asian Development Bank."
It will however contribute about half the $130- billion in capital to fund the bank.
Governance is being seen as an issue - but China's Finance Ministry says prospective founding members will be consulted.
The 57 founding members were finalized last week - and come from all parts of the world - with two notable exceptions.
The United States - which campaigned against many from joining - along with Japan - both cited transparency - along with environmental and labour concerns.
Taiwan was denied membership.
Economist Clifford Bennett says that by joining the bank Australia gains access to a growing Asian knowledge base, while Australian companies bidding for overseas contracts have a greater chance of securing them.
"It works across Asia, so Australia needs to be seen to be part of that economic region and we're badly in need of infrastructure so it could even help to take some pressure off the budget in the years to come, there would be no immediate benefit, but certainly over the years to come we could benefit significantly."
Apart from having a greater say - China's decision to fund most of the bank - would make better use of the 4- trillion dollars in foreign reserves that it holds.
Clifford Bennett says the AIIB could deliver a single currency for Asia, like the Euro, in about 15 years.
"We could have a currency in Asia in 15 to 20 years time which is akin to the Euro for Europe. A lot of people criticise the Euro but it has sustained and survived a major crisis and threat and if we had that scenario in Asia we could be selling our iron ore and copper to China without any upward appreciation on the currency at all and we'd have a far more balanced economy then."
The bank is expected to be in operation - by the end of the year.
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