Holy crap, Kerry and Obama personally told the Aussies not to join the bank? They are scared for sure, are they wetting their pants on this?
From Australia:
John Kerry to Tony Abbott: steer clear of China bank
Phillip Coorey and Lisa Murray - 23 Oct 2014 23:36:00
Prime Minister Tony Abbott meets with US Secretary of State John Kerry in Indonesia this week. Photo: Alex Ellinghausen
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United States Secretary of State John Kerry has personally asked Tony Abbott to keep Australia out of China’s new infrastructure development bank, intensifying Canberra’s dilemma over which way to jump.
Australia has been under pressure from the US for some time to not become a founding member of the bank and it is understood Mr Kerry put the case directly to the Prime Minister when the pair met in Jakarta on Monday following the inauguration of Indonesian President Joko Widodo.
It is unclear whether President Barack Obama also raised it in a phone call with Mr Abbott on Wednesday. China, which wants Australia and South Korea as foundation members, has given Canberra until Friday to make a decision but a government source said Australia would not be meeting this deadline.
“We’re still negotiating,” a source said.
The US sees the proposed $US50 billion ($57 billion) Asian Infrastructure Development Bank as a rival to the World Bank and the Asian Development Bank (ADB), which are dominated by the US and Japan.
A US source told The Australian Financial Review that while there was an accepted need for additional public, private and multilateral development bank support for infrastructure development, the Chinese proposal did not meet acceptable standards on issues such as governance, environmental and social safeguards, procurement, and debt sustainability.
The US argues that reforms to boost the lending capacity of the ADB by 20 to 40 per cent would meet the capacity demand.
“The World Bank has also instituted reforms that will nearly double its annual lending capacity, from $US15 billion to as much as $US28 billion a year,” the source said. India, and possibly Indonesia, are understood to be among the 21 countries which will sign up to the bank, raising pressure on Australia to join what could be one of Asia’s biggest lenders.
China is trying to ease governance concerns with plans to set up an international team, drawing from member countries, that will be in charge of designing the governance and operational structures for the bank.
With Australia not intending to sign up this week, it is unclear whether it will be able to have any say in how those structures are designed. Supporters of Australia’s involvement in the bank say it would be better to be in at the ground floor so it can influence that process.
The participation of India, the world’s second most populated countries and one of the bigger economies in Asia, will bolster the initiative. It is understood China is still negotiating with Japan, the US, South Korea and Australia and has assured those countries the door remains open for them to have a role in the bank.
The Bank’s president Jin Liqun will hold a briefing in Dubai next month as part of the Boao Forum financial co-operation conference. He is also expected to meet with infrastructure company and banking executives to look at how the private sector can be involved.
The federal government is divided over the proposal with Treasurer Joe Hockey and Trade Minister Andrew Robb keen while Foreign Minister Julie Bishop has reservations.
“The Chinese are aware there are a number of fundamental principles that need to be met and we will assess that situation as to whether or not [they] have been met,” she said.
Pressed on timing she said it would be a “matter for the Prime Minister to make that announcement”.
This weekend in Sydney, Mr Robb is hosting Trans-Pacific Partnership negotiations, which excludes China....
