AIIB highlights urgency for sustainable infrastructure

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President Moon urges sustainable, people-focused investment

SEOGWIPO, JEJU ISLAND — The second annual meeting of the Asian Infrastructure Investment Bank opened in Jeju on Friday, with South Korean President Moon Jae-in echoing the organization’s emphasis on the dual goals of economic growth and environmental protection.

“What the AIIB pursues in its investment direction goes well with the ways that the Korean government seek to achieve economic growth,” Moon said in his congratulatory address in front of more than 2,000 participants, including ministerial-level officials, business leaders and academic researchers and professors from 77 countries.

President Moon Jae-in delivers a congratulatory address at the AIIB annual meeting in Jeju on Friday. (Yonhap)

The AIIB meeting was the first international event held in Korea since the Moon government was inaugurated last month.

With three new countries — Argentina, Madagascar and Tonga — announcing their memberships as of Friday, the AIIB now boasts 80 member nations, a larger number than the Asian Development Bank with 67 nations led by Japan.

“Infrastructure investment should contribute to environmental sustainability,” Moon said. “To join the global moves, Korea is preparing to expand its use of renewable energy to up to 20 percent of total power generation by 2030, while reducing coal-fired power generation and becoming a non-nuclear country.”

Infrastructure investment should also contribute to job creation, Moon stressed, saying “Korea’s new government is putting ‘people-centered economy’ at the center of its economic policies in order to produce quality jobs.”

Moon also delivered a message about North Korea to the world.

“Since the Korean peninsula lies at the far eastern end of the Asian continent, when the South and North are connected by railways, a new Silk Road will be completed.”

In a speech, AIIB President Jin Liqun also highlighted the urgency of establishing “quality infrastructure” for the sustainability of Asia, saying that building sustainable infrastructure is a shared objective of the member countries.

“Asia is at a critical juncture,” Jin said. “Its role on the world stage is increasing, thanks in large part to its growing economy, demographic changes, technological innovations and, more importantly, enhancements in corporate and state governance. Despite these impressive achievements, the region now faces new and complex challenges. In particular, rapid urbanization, a massive infrastructure gap, the impact of climate change and environmental degradation are very tough problems to solve.”

Quality infrastructure pursued by the AIIB refer to those that foster economic growth while minimizing damage to the environment. And sustainability has become a pressing issue for the international community, since the United Nations’ adoption of a new long-term development agenda in 2015. The UN Sustainable Development Goals have been recognized as the dominant paradigm of development and a key mandate of multilateral development banks.

“We should achieve the goals of economic development and environmental protection at the same time in the 21st century,” said Jin.

“The AIIB vows to help tackle these challenges. Our approach is to support economic and social development by investing in infrastructure and other productive sectors.”

These challenges cannot be addressed with any degree of success by any one institution single-handedly — be it governmental, social or corporate, the AIIB president added.

Founded in January 2016, the AIIB is a China-led multilateral financial organization that offers loans for infrastructure projects across Asia. It is often called the “World Bank for Asia.”

Korea is currently the fifth-largest shareholder of the AIIB with a 4.06 percent stake worth 4 trillion ($3.4 billion). Kim Dong-yeon, deputy prime minister for economic affairs, elaborated on Korea’s investment direction for sustainability at the event.

“Investment decisions often aim to maximize economic benefits at the expense of environmental and social impact,” Kim said. “An inconsistency between infrastructure policies and economic policies could diminish the impact of investment.”

Finance Minister Kim Dong-yeon speaks at the AIIB annual meeting in Jeju on Friday. (The Ministry of Strategy and Finance)

The Ministry of Strategy and Finance said the government will donate an additional $8 million for the bank’s special fund for preparations of infrastructure projects for developing countries this year.

Korea will be the second country to offer the financial donation for the special fund after China.

AIIB President Jin expressed gratitude toward Korea’s offer at a bilateral meeting with Kim on Thursday.

“The Korean government will share the country’s growth experiences through infrastructure investments with the AIIB,” Kim said. “Korea and AIIB can form a mutually beneficial investment partnership.”

During a forum held as part of the annual meeting, experts delved deeper into the need for sustainable infrastructure in Asia.

Lord Nicholas Stern, a professor at the London School of Economics, said, “Urgency for having sustainable infrastructure is crucial.”

“AIIB was created at a right time to tackle the challenges,” he said. “If not now, it will be difficult to reach the Paris goal in the next 20 years.”

About 70 percent of carbon emissions are connected to infrastructure and about 70 percent of investment opportunities come from Asia, the professor said.

“We need a right kind of finance at a right time to turn these opportunities into real,” he added.

The board of governors of the AIIB, meanwhile, announced that the bank’s third annual meeting will be held in Mumbai, India, in June 2018.

By Song Su-hyun (song@heraldcorp.com)

 

Source  :  The Korea Herald

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