The Asian Infrastructure Investment Bank has approved Argentina as the latest member to the multilateral development bank in a move that highlights a growing relationship between Asia and South America.
For Argentina, admittance to the AIIB will help the country to draw in foreign investments, well-needed capital for a country emerging from a recent debt crisis and seeking international assistance.
Argentinian president Mauricio Macri has pledged to increase infrastructure investments in his country since taking office in December 2015. Argentina ranked 85th out of 138 countries in the World Economic Forum’s Global Competitiveness Index for infrastructure development.
Macri launched programmes last year to mobilise $33 billion of investments in the transportation sector by 2019 and $36 billion for the energy sector by 2025. Earlier this month, Argentina drew financing from the International Finance Corporation, which invested $50 million to support transportation upgrades.
There are warming relations between the AIIB and Latin American countries. Argentina is the sixth Latin American member to join the nearly two-year old MDB, joining Bolivia, Brazil, Peru and Venezuela.
“Well-integrated infrastructure and enhanced connectivity between Asia and the rest of the world has far reaching benefits for the global economy,” AIIB president Jin Liqun said.
AIIB vice president Sir Danny Alexander added: “Latin American countries’ intention to take part in the AIIB reflects the fact that AIIB commitments are global.”
Argentina must complete required domestic processes and make a first capital deposit with the bank before its membership becomes official.
AIIB launched in 2016 and has since collected $100 billion of capital and approved over $1.7 billion in financings for nine infrastructure projects throughout Asia. The bank is now assessing 11 proposed projects across urban development, energy and transport sectors.