Disir
Platinum Member
- Sep 30, 2011
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What is the Asian Infrastructure Investment Bank and what are its goals?
The AIIB is a regional international financial institution originally proposed by the Chinese government in 2013 and launched in October 2014. The objective of the bank is to finance road, rail, port, and other infrastructure construction projects. More than twenty countries joined the AIIB at the start, but leading G7 economies, as well as South Korea and Australia, initially declined to join. Over the past several months, more countries have signed on, and with the decision of the UK and three eurozone economies to join, there are now about thirty members. The bank was established with $50 billion in capital, making it roughly one-third the size of the Asian Development Bank (ADB), but that capital is expected to grow to $100 billion as more countries join. The AIIB expects to make its first loan late this year.
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The Chinese-led AIIB hopes to do infrastructure better, while also pledging to work closely with other institutions. Still, there is little doubt that the initiative also exposes Chinese frustration with global institutions, the failure of these institutions to reform to provide a greater voice to emerging powers, and the United States’s inability to pass International Monetary Fund (IMF) quota reform. From this perspective, the AIIB—along with its companion BRICS bank [comprising Brazil, Russia, India, China, and South Africa]—is a challenge to the existing global economic order and a clear statement of intent from China that it desires to play a leading role in defining new rules of the game for investment in Asia.
Why is the decision by four G7 economies to join the bank significant?
In the fall of 2014, the U.S. government caught many by surprise when it made an aggressive and public effort to persuade countries not to join the Beijing-led institution. The United States clearly had concerns about the economic and political implications of a new multilateral lending agency led by China, and in any event, it was highly unlikely that the U.S. Congress would approve a financial contribution allowing the United States to participate. The Obama administration’s efforts led a number of countries to hold back from signing on the the AIIB. The decision by the UK, and subsequently, France, Germany, and Italy, to participate is therefore significant not only because they will be major shareholders, but also because the decision by traditional U.S. allies signals that Washington is increasingly isolated.
http://www.cfr.org/global-governance/bank-too-far/p36290
Should the US join?
The AIIB is a regional international financial institution originally proposed by the Chinese government in 2013 and launched in October 2014. The objective of the bank is to finance road, rail, port, and other infrastructure construction projects. More than twenty countries joined the AIIB at the start, but leading G7 economies, as well as South Korea and Australia, initially declined to join. Over the past several months, more countries have signed on, and with the decision of the UK and three eurozone economies to join, there are now about thirty members. The bank was established with $50 billion in capital, making it roughly one-third the size of the Asian Development Bank (ADB), but that capital is expected to grow to $100 billion as more countries join. The AIIB expects to make its first loan late this year.
...
The Chinese-led AIIB hopes to do infrastructure better, while also pledging to work closely with other institutions. Still, there is little doubt that the initiative also exposes Chinese frustration with global institutions, the failure of these institutions to reform to provide a greater voice to emerging powers, and the United States’s inability to pass International Monetary Fund (IMF) quota reform. From this perspective, the AIIB—along with its companion BRICS bank [comprising Brazil, Russia, India, China, and South Africa]—is a challenge to the existing global economic order and a clear statement of intent from China that it desires to play a leading role in defining new rules of the game for investment in Asia.
Why is the decision by four G7 economies to join the bank significant?
In the fall of 2014, the U.S. government caught many by surprise when it made an aggressive and public effort to persuade countries not to join the Beijing-led institution. The United States clearly had concerns about the economic and political implications of a new multilateral lending agency led by China, and in any event, it was highly unlikely that the U.S. Congress would approve a financial contribution allowing the United States to participate. The Obama administration’s efforts led a number of countries to hold back from signing on the the AIIB. The decision by the UK, and subsequently, France, Germany, and Italy, to participate is therefore significant not only because they will be major shareholders, but also because the decision by traditional U.S. allies signals that Washington is increasingly isolated.
http://www.cfr.org/global-governance/bank-too-far/p36290
Should the US join?
