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North Korea denied AIIB entry

March 31, 2015

By Do Je-hae

North Korea was denied entry to the China-led Asian Infrastructure Investment Bank (AIIB) in February due to an absence of proper economic data, according to foreign media reports.

Emerging Markets reported that Beijing rebuffed Pyongyang’s attempt to join the AIIB because it was not able to present a snapshot of its economy and finances.

The British financial news website said that a North Korean senior envoy had approached Jin Liqun, presumptive inaugural chairman of the AIIB, in February about joining the China-led development bank.

Jin had asked for details on North Korea’s economic activity to be broken down by industry, including the state of the country’s public finances and its tax base. It was also asked to supply plans for an infrastructure project it would pursue with AIIB cash.

The website quoted experts who had information on the matter. Masahiro Kawai, former dean and chief executive officer of the Asian Development Bank Institute in Manila, said, “The AIIB needs ultimately to be repaid when it lends to sovereign states.”
“It’s a multilateral. It’s not an institution set up to disburse grants. So unless North Korea can disclose information to a satisfactory extent, I don’t think the AIIB is going to be able to include the country as a member.”

North Korea on Monday marginalized Seoul’s decision to join the AIIB as a trade-off for the deployment of an advanced U.S. missile defense system on its soil. The U.S. is considering deploying the Terminal High Altitude Area Defense (THAAD) system in South Korea, citing growing military threats from the nuclear-armed North.

South Korea announced its decision last week to participate in the AIIB, along with some Western states, including Britain, Germany and Australia, as founding members of the new development bank.