By Kim Hyo-jin
If a China-led bank allows North Korea to enter into its system, it could help resolve the North Korean nuclear standoff, a North Korea expert said Wednesday.
Bradley Babson, former vice president of the World Bank, said in a contribution article for the website 38 North that the international community use the Asian Infrastructure Investment Bank (AIIB) as a new tool for productive engagement with the reclusive nation.
“By establishing infrastructure development assistance as an incentive for Pyongyang to carry out political and economic reforms, the bank could contribute toward security and economic outcomes beneficial to North Korea and its neighbors,” Babson said.
China has launched the AIIB as a move to counterbalance U.S. and Japan-led multilateral lenders such as the Asian Development Bank (ADB) and the World Bank. The U.S. and Japan did not join, raising suspicions on China’s lack of transparency.
According to diplomatic sources, North Korea also expressed interest in China's alternative to the World Bank in April, but failed to apply for membership because it does not meet its criteria.
Fifty-seven founding members of the bank held meetings in Singapore until May 22 before signing the final “Articles of Agreement” scheduled in June.
The former World Bank official prospected that North Korea would not have easy entry to the bank in the foreseeable future, due to its prolonged economic and financial conditions.
But he said the bank can allow Pyongyang an opportunity to learn its normal financial system by giving the nation an observer status.
Calling it a “gradual, phased approach,” Babson said such move could motivate the hermit nation to demonstrate a commitment to internationally backed economic and financial reforms.
He also said a meaningful economic incentive in the process of accepting the nation to the AIIB can help deal with Pyongyang-caused security challenges.
“By helping Pyongyang to fund infrastructure that it badly needs for economic growth, the bank could help advance discussions in political talks on security issues; not just on nuclear issues but also in creating a multilateral framework for Northeast Asia.”
A new round of six party talks can be launched on the sidelines, he added.
“Participants of the talks could link progress in the political talks to support for advances in the relationship between North Korea and the AIIB,” the expert said.