Local Infrastructure

 

The Korea Institute for International Economic Policy remarked on April 27 that Korea can get 3.35 percent to 3.93 percent of the shares of the Asia Infrastructure Investment Bank (AIIB), the ninth to fifth-highest among those of the 57 founding members.

At present, member countries are discussing how to divide the shares of the bank. The AIIB is planning to allow a 75 percent share ratio for Asian countries, but the percentage may be somewhat decreased depending on the result of the negotiations with European nations.

According to the institute, Korea’s share ratio reaches the maximum when a 60 percent weighting is added to the market exchange rate-based GDP and a 40 percent weighting is given to purchasing power parity-based GDP with the Asian members’ share ratio fixed at 75 percent. In this case, China can have 30.85 percent of the bank, followed by India (10.4 percent), Indonesia (3.99 percent), Germany (3.96 percent), and Korea (3.93 percent).

One of the most important variables is the classification of Russia. Korea’s share ratio drops to 3.35 percent when Russia is classified as an Asian country, and the share ratio of the non-Asian countries is adjusted to 30 percent. In this case, China’s share ratio falls to 26.27 percent, too.

“Once Russia is regarded as a part of the Asian group, it will compete with India for the second-largest shareholder position,” the institute explained, “Then, the shares of Germany, France, Britain, and Brazil increase as well so Korea falls in the rankings.”

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