Nash Stuart: International Finance Agreements Amendment Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: International Finance Agreements Amendment Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7822. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): Mr Cunliffe does bring up an interesting point. Mr Cosgrove and I alluded to it but you never know it could arise. Under article 2 “Functions” in clause (iii) of new schedule 8 it actually says the fund is to “encourage private investment in projects enterprises and activities contributing to economic development in the region in particular in infrastructure and other productive sectors and to supplement private investment when”—and this is the important part—“private capital is not available on reasonable terms and conditions;”.I suppose there could be an argument that why would private capital invest in a wharf in—Ōpōtiki did you say Mr Cunliffe? [Interruption] In a wharf in Ōpōtiki. If the Government backs down from saying we will not invest in this and yet there are defined social and economic benefits for that reason then I suppose there is nothing stopping—I do not know whether it would be the Ōpōtiki District Council or whatever applying to the bank and I assume it probably has to be through the New Zealand Government for funds to build this wharf on reasonable terms and conditions. And again what defines reasonable terms and conditions? They may look at the New Zealand market and say: “Well there’s a risk premium in this and therefore it’s going to get quite high interest rates.” Or then again it could be at the rates that you borrow money from a bank in China that has negligible interest rates. Who knows? I mean I find it difficult. It is an interesting proposition but you never know it might occur.What I would like to look at is schedule A of new schedule 8. This lists the countries and the number of shares and their capital subscription to this fund. And it is interesting because there are 37 regional countries and there are 20 non-regional members that have decided to contribute money in varying amounts to this fund. It really goes to show that according to the amount of money going in there really has been a gap in the funding infrastructure or in the funding mechanisms to really drive infrastructural growth forward hence the need for this bank because as a number of speakers have alluded to America has been dead against this because it thinks the old institutions already fit the bill. But I would suggest that by looking at the countries that have invested in this perhaps America is on a little bit of a limb when it believes that in fact there is no need for such a bank. Time will tell.But let us have a look at some of these countries. Let us start at the top: Australia. When we say that one of the Americans’ concerns about this is that the governance would not be up to scratch there are a number of countries here that would not go near this if they believed that the infrastructure or the governance arrangements for this bank were anything but absolutely first-class and in line with the expectations of developed countries. So we have got Australia. Australia is actually putting in $3.69 billion. That is a lot of money. The reason why I think Australia is putting so much money in is—well it has said it is very much part of this region. It is very keen to see these markets grow because being a commodity producer it needs to move its economy from pure commodities towards finished goods and other products and it sees this market as a very important one. So it is putting in $3.69 billion.Azerbaijan is putting in $254 million. I am not even too sure where Azerbaijan is. I know it is part of the old Soviet Union. I had to ask Mr Goff who I think has been to 190 of the 192 countries that exist in the world.Hon David Cunliffe: It’s warm and dry.STUART NASH: It is warm and dry. Even Mr Goff said it is one of the very few countries—one of about three countries in the world—he has not been to. But it has decided—Hon Phil Goff: They used to test nuclear weapons there.STUART NASH: Oh did they? Well they have decided that they need to diversify their economy—their part of this region. They are actually putting in $254 million themselves. I do not know how big the economy of Azerbaijan is but I suspect it is not particularly developed.David Bennett: It’s oil mate. It’s oil.STUART NASH: It is oil? Well Mr Bennett knows a lot about it but I would suggest that this is a substantial amount of money or a substantial commitment from an economy that understands the value of development.Bangladesh—keeping in mind that we committed US$461 million—has committed US$660 million. Bangladesh is a country we tend to see in the newspaper when there is a massive flood that wipes out villages and causes great devastation. It understands the implications of such a bank and I suspect places like Bangladesh will actually benefit substantially from the infrastructural development that will go on in the region and it may well happen in its country. It is committing US$660 million.Brunei—[Bell rung] Mr Chair there are a few more countries.The CHAIRPERSON (Hon Trevor Mallard): I am slightly stretched on the relevance. It is not National Geographic.STUART NASH: Well I am talking about schedule A here. OK well what I will do is talk about how some of the really big economies see the development of this and understand the value of development in this region.We have got China. I mean we all know that China is one of the driving forces behind this. It is the world’s second-largest economy and in my view it is not long before it is the world’s largest. But is it putting in nearly $30 billion. Close to 30 percent of all the money committed to this is being put in by China. India is putting in $8 billion. And again I suspect that India will be a recipient of a lot of the development that goes on in the region because you know it is a country that is on a fast track to developed nation status. Indonesia is putting in $3.3 billion. Even Iran is putting in $1.5 billion. So as we can see this certainly is not an American-backed or a Chinese-backed alliance when we have got countries like Iran—Israel is putting in $749 million which is interesting. Israel comes below Iran in the schedule. I think it is probably the only time you will see them side by side. We have got Korea putting in $3.7 billion. Turkey is putting in $2.6 billion.But it is not only these countries within the region that are putting in a substantial amount of money—it is about three-quarters or $75 billion. Well it is three-quarters of all the money heading into the fund. But the interesting thing for me is the non-regional members that are actually putting in a substantial amount of money. These are the ones that recognise the absolute potential for their own domestic markets in growing the Asia-Pacific market. We have got Brazil which is putting in $3.1 billion. Heaven knows it is spending a lot of money at the moment developing Olympic stadiums and that sort of carry-on. That should be a good tournament. We have actually got France which is putting in $3.3 billion and Germany is putting in $4.4 billion.So when the Americans had concerns about the governance or the arrangements or the legitimacy of this bank I suspect that it is one of very few countries in the OECD that has such concerns. When Germany is committing $4.4 billion to this bank then you know that there is something going on. Italy—$2.5 billion. We have even got Luxembourg committing $69 million. Again I do not know the size of the Luxembourg economy but I suspect—well I do know it is not a particularly big one so $69 million is a lot of money for it to put in.The last thing I would say is there are just a couple more economies from outside the region that are putting in a billion dollars or more. They are the Netherlands Spain and the United Kingdom. The United Kingdom is putting in $3 billion.I suppose the point I am trying to highlight is that this should not be seen as just a regional bank funded by regional players for the benefit of just our regional and local economies. This is a bank that has international buy-in. I think it will play a significant part in the coming years of the development of the economies that are actually going to drive growth within our own economy and certainly the region. That is why I am supporting the bill and I am very pleased to support it. Thank you very much.