Japan to invest $132b in Asian projects: Report

Move comes as China-led AIIB members prepare to meet in S'pore

TOKYO - Japan will announce a US$100 billion (S$132 billion) plan - the same size as the China-led Asian Infrastructure Investment Bank (AIIB) - to invest in roads, bridges, railways and other building projects in Asia, it was reported yesterday.

In the latest twist to the tussle for influence in the fast- growing region, Prime Minister Shinzo Abe is set to unveil the five-year public-private partnership tomorrow, Jiji Press reported.

"The envisioned assistance is aimed at demonstrating Japan's stance to contribute to building up high-quality infrastructure in Asia through human resource development and technological transfers, and showing the difference from the AIIB, so that Japan can keep a high profile in the region," Jiji said without naming its sources.

The report comes as representatives from the prospective 57 AIIB founding members attend a three-day meeting in Singapore, starting today.

Japan's investment funds would come through government-affiliated bodies, such as the Japan International Cooperation Agency and the Japan Bank for International Cooperation, as well as the Japan-led Asian Development Bank (ADB), Jiji said.

Earlier this month, Finance Minister Taro Aso said at an event hosted by the ADB that Japan was drafting a plan to boost investment in Asian infrastructure.

The ADB recently said it would boost its annual lending and grant approvals by 50 per cent to as much as US$20 billion.

The plan to be announced by Mr Abe also includes strengthened lending through the ADB, Jiji said.

In Singapore, the Ministry of Finance (MOF) said yesterday that the 5th chief negotiators' meeting will discuss the draft articles of agreement and operational policies for the AIIB.

The meeting will be co- chaired by vice-minister Shi Yaobin of China's Ministry of Finance and MOF deputy secretary Yee Ping Yi.

Among the Group of Seven industrialised countries, the United States, Japan and Canada remain absentees.

The US led a high-profile but ultimately unsuccessful attempt to dissuade allies like Britain and Germany from taking part.

US President Barack Obama and Mr Abe said last month they did not oppose the bank, but stressed it needs high standards and transparency.

Critics have said the AIIB will not demand the same governance and environmental standards imposed by other international bodies, such as the US-based International Monetary Fund and World Bank, and the ADB.

But supporters say fears of undue Chinese influence are overblown, and Beijing says it will not hold veto power at the AIIB, unlike the World Bank where Washington has a limited veto.

Founder members will initially pay up to one-fifth of the AIIB'S US$50 billion (S$66 billion) authorised capital, which will eventually be raised to US$100 billion.

Few observers doubt there is a need for billions of dollars in infrastructure investment in Asia.

The region also offers rich pickings for nations with strong infrastructure industries like Japan.