File Photo of Barack Obama.
Washington:
US President Barack Obama and Japanese counterpart Shinzo Abe said Tuesday that they were not opposed to China's Asia Infrastructure Investment Bank, but stressed it needs high standards and transparency.
Neither said their country would join the new AIIB -- which many European and Asian allies have signed onto already -- but both said they would work with it if its project and loan standards are strong.
"Asia needs infrastructure ... To the extent that China wants to put capital into development projects around the region, that's a positive," Obama said in a joint White House press conference with Abe.
"What is involved is exactly what Prime Minister Abe said, which is if we're going to have a multilateral lending institution, then you have to have some guidelines by which it's going to operate. That's how the World Bank operates," he said.
"In Asia there's a tremendous demand for infrastructure. And for the financial system to respond to this is very important. On this recognition we see eye-to-eye with China," Abe said.
But Abe said any projects the bank backs need to pay close heed to the needs of societies and the environment.
"It's not only about the lenders, but the borrowing nation," Abe stressed.
"And so in that sense a proper review as to whether lending the money to a country will be of benefit to the country, rigorous review is very important."
"So from such a standpoint Japan and the United States should cooperate and we need to continue dialogue with China."
Obama insisted that, contrary to media reports, Washington had not opposed others like Britain joining the AIIB, for which Beijing has signed up some 57 founding members.
But he said the United States wants to be sure its standards for the projects it backs are high.
"What we don't want to do is just be participating in something and providing cover for an institution that does not end up doing right by its people.
"Because when these countries borrow money, even from a development bank, for a boondoggle project that doesn't work, they're oftentimes still on the hook for paying that money back. And there have been experiences like that across continents and across decades."
Neither said their country would join the new AIIB -- which many European and Asian allies have signed onto already -- but both said they would work with it if its project and loan standards are strong.
"Asia needs infrastructure ... To the extent that China wants to put capital into development projects around the region, that's a positive," Obama said in a joint White House press conference with Abe.
"What is involved is exactly what Prime Minister Abe said, which is if we're going to have a multilateral lending institution, then you have to have some guidelines by which it's going to operate. That's how the World Bank operates," he said.
"In Asia there's a tremendous demand for infrastructure. And for the financial system to respond to this is very important. On this recognition we see eye-to-eye with China," Abe said.
But Abe said any projects the bank backs need to pay close heed to the needs of societies and the environment.
"It's not only about the lenders, but the borrowing nation," Abe stressed.
"And so in that sense a proper review as to whether lending the money to a country will be of benefit to the country, rigorous review is very important."
"So from such a standpoint Japan and the United States should cooperate and we need to continue dialogue with China."
Obama insisted that, contrary to media reports, Washington had not opposed others like Britain joining the AIIB, for which Beijing has signed up some 57 founding members.
But he said the United States wants to be sure its standards for the projects it backs are high.
"What we don't want to do is just be participating in something and providing cover for an institution that does not end up doing right by its people.
"Because when these countries borrow money, even from a development bank, for a boondoggle project that doesn't work, they're oftentimes still on the hook for paying that money back. And there have been experiences like that across continents and across decades."
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