State left behind by delay joining bank

The Department of Finance has failed to explain why Ireland did not apply to be a founding member of a major new Asian investment bank.

A number of European nations, such as France, Germany, and the UK, joined the Asian Infrastructure Investment Bank (AIIB) as founding members early last year.

Ireland took the decision to make a formal application in December 2015.

The estimated cost of Ireland’s membership is €50m over five years.

The AIIB, established to rival the likes of the World Bank and Asian Development Bank, will fund a wide range of infrastructure projects in Asia.

“Ireland’s interest in AIIB membership is primarily based on geopolitical and economic considerations, including trade relations with China and the wider Asian economy,” said Finance Minister Michael Noonan.

“Over the past 15 years, Ireland has increased its engagement with Asia, particularly China, the world’s second largest economy, in a broad number of areas.

“Ireland’s priorities relate to bilateral trade and investment, particularly: higher education; agri-food; tourism; and aviation-financing sectors.”

A spokesperson for the Department of Finance could not explain the timing of Ireland’s application or whether officials considered founding members to be at an advantage to those countries joining at a later date.

The spokesperson said Ireland is “serious” about the AIIB and had commenced its membership application.

“Ireland’s voting rights would be comparable to countries with a similar-sized economy,” the spokesperson added.

Mr Noonan confirmed that no external advisors had been appointed as part of Ireland’s application.

Sinn Féin finance spokesman Pearse Doherty, who asked the minister for details of Ireland’s application, welcomed Ireland’s application but criticised its timing and the lack of transparency around the process.

“Even from the reply I have received it is clear that founding members have a status in the bank,” he said. “In this case, they are given oversight of Ireland’s membership application. Given this, we have to wonder why Ireland did not apply as a founding member last year.

“Most of our major trading partners have signed up for this opportunity so it seems clear-cut that Ireland’s best interests are served being in rather than out. I would have been interested to hear a debate before an application rather than now when the deal is done.

“It is clear that this was a very insular decision making process on a major decision for the State involving a commitment of €50m over the next five years.”