I wrote about this a few weeks back. I like this new initiative from the second largest economy in the world as well as the country with the highest level of currency reserves in the world, China. Read here: Asian Infrastructure Investment Bank: (AIIB) Sorry, I do not like just a few of these ‘last resort’ institutions such as IMF or World Bank or to a smaller extent, the Asian Development Bank. Actually, all these institutions are controlled by just a few countries and it’s sad when a country has to ask for help. The conditions are likely to be very harsh BUT the same conditions may not be applicable for the countries which are controlling them.
This new initiative would have up to US$100 billion in funds. Most of it to be contributed by China. It will assist in funding projects throughout ASIA. Note: ASIA. Instead of being just a purely development institution, it will function more like a commercial bank instead. In other words, to benefit the member countries. Member countries contribute their share based on the size of their economy. One major surprise was Australia applying to be a member despite United States against it. Of course other major and developed countries potentially joining include the UK, Germany, Italy and France. That ‘order’ may have been broken for this to happen and it is a good thing to see that countries can be objective enough when it comes to potentially benefitting from AIIB as there are lots of projects within Asia which is in dire need of funding but Asian Development Bank just could not lend enough.
Countries within the AIIB? 21 Asian nations, including China. Another 21 other countries have also applied to join. Russia has applied too. Nevertheless, according to Chinese media, not all of these applications may be approved. Currently, it is just 30 out of 42. Founding members include: China, Bangladesh, Brunei, Cambodia, India, Indonesia, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Qatar, Singapore, Sri Lanka, Tajikistan, Thailand, Uzbekistan, Vietnam. A few nations are not part of AIIB currently. They include The United States, Japan and Canada. US said, AIIB may not have sufficient transparency and governance standards. I am very sure they have done their homework to say this.
In IMF or World Bank, despite US not having majority votes but it wields enormous ‘persuasive’ power. Of course the rest of the institutions need not worry. AIIB is still much smaller than the European Development Bank, the World Bank and even the Asian Development Bank.
Personally, I support any initiative which can help ASIA to really move forward. I seriously think AIIB will help to fasten the whole process, especially where infrastructure is concerned. Come on, every region in the world has their economic groupings for the longest of times. There’s nothing wrong to have another vehicle which is well supported by a country which should be the largest economy in the future.
written on 3 Apr 2015
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