The UAE has announced that it will join the Asian Infrastructure Investment Bank (AIIB) in an effort to tap into the booming Asian market.
AIIB was first proposed by Chinese President Xi Jinping and was established at the Asia-Pacific Economic Cooperation Forum in 2013.
Also touted as a rival to the other global financial institutions such as the World Bank and Asian Development Bank, the lender will help mobilise funding for infrastructure projects in Asia.
It will also act as a platform to facilitate funding for countries looking for investments in Asian countries.
AIIB will mainly focus on attracting investments to sectors such as energy and power, transportation, telecommunications, rural infrastructure, agriculture development, water supply and sanitation, environmental protection, urban development and logistics, a statement said.
Abu Dhabi Fund for Development (ADFD), which was established to facilitate investments in the developing world, will represent the UAE on the board of AIIB, the statement added.
The UAE joins a number of other Gulf countries such as Saudi Arabia, Kuwait, Oman and Qatar who have become members of the bank.
The UAE’s membership also comes as inter-trade figures between the Emirates and China showed double digit growth over the last few years.
Trade between China and the UAE grew by 14 per cent year-on- year to $46 billion in 2013, according to estimates from the UAE’s Ministry of Economy.
Further growth was seen in the first nine months of 2014 with trade rising a quarter to $35 billion.
Amidst slowing growth in Europe- a traditional investment haven for Gulf Arabs-the UAE is looking to increase its investments in Asia and specifically in China.
An official at the UAE’s Ministry of Economy said earlier this year that both the Emirates and China are looking to set up a joint investment fund.
The fund, which is yet to be operational, will look to invest in clean energy – a common area of interest.
“In the light of joint strategic ties between the UAE and China, and their mutual interests in fuelling growth and infrastructure development in developing countries, both countries have partnered to set up a strong international platform to actively drive development efforts,” said Sultan Ahmed Al Jaber, UAE Minister of State, referring to AIIB.
“Being a founding member of AIIB will boost the prime economic role played by the UAE regionally and internationally, by focusing efforts on development projects with great socio-economic benefits.”