Indonesia's finance ministry signs MOU to join China-backed Asian bank

[JAKARTA] Indonesia's finance ministry has signed a memorandum of understanding to join a China-backed Asian infrastructure bank, a government official confirmed on Thursday.

Indonesian Finance Minister Bambang Brodjonegoro on Tuesday signed the MOU with Chinese Ambassador to Indonesia Xie Feng in attendance. "It was signed by the Indonesian finance minister on Nov 25," foreign ministry spokesman Michael Tene told Reuters in a text message.

Indonesian Cabinet Secretary Andi Widjajanto said last week that new President Joko Widodo had agreed in principle to joining the bank pending two requests. Local media reported the requests included placing the headquarters of the bank in Jakarta and having Indonesia play a larger role in the institution.

The US$50-billion Asian Infrastructure Investment Bank (AIIB), launched last month in Shanghai, is seen by the United States as a challenge to the Western-dominated World Bank and Asian Development Bank. "Indonesia highly appreciates the proposal of the Asian Infrastructure Investment Bank, and has been actively involved in the preparation process.", said Brodjonegoro, according to a statement on a Chinese embassy website, which included a picture of the signing ceremony.

REUTERS