1/19/2016

AIIB starts new era for Asia
By Chua Chin Leng (chinadaily.com.cn)Updated: 2016-01-16 11:27

After three years in the making, the Asian Infrastructure Investment Bank (AIIB) officially opens for business on Jan 16, 2016. The AIIB is a milestone for Asia; it’s for Asian countries to take charge of their futures going forward. Asian countries now have an Asian bank financed mainly by Asian countries providing funds for infrastructure development in Asia. 

The positive contribution of an Asian bank to finance infrastructure development, energy, and transportation in Asia is clear and obvious. The encouraging international membership is a vindication of the need and the niche role that AIIB could play for its Asian members. 

The participation of many western economic powers gives credence and affirmation that the AIIB is on the right path and would be an essential organization in the same league as the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB). On a positive note, the AIIB would play a complimentary role to these existing institutions, to provide financing and fill the gaps that the existing structure and organizations could not do. The needs of Asian countries to develop their coal, thermal, and hydro power infrastructure excluded by the Bretton Woods Agreements would now be served by the AIIB. 

The challenges faced by the AIIB are more political than economics. The opposition from the American and Japanese corner arises from their perception that the AIIB is a challenge to their dominance and monopoly in the existing world order. 

No one can deny the great economic benefits that the AIIB would bring to Asian countries. The political rhetoric is just that and economic considerations would rule the day as was seen by the last minute entry of the Philippines becoming a founding member. No Asian country would want to be left out from benefiting from an Asian Bank with a primary role of supporting the infrastructure development of Asian countries.

Obstacles, real and imaginary, would be placed by beneficiaries of the old world order into the path of the AIIB. It is important that Asian countries like China, India, and Russia would put their priorities right, to see to it that an Asian bank could succeed under their leadership to serve Asian interests and the ascendance of Asian powers, to free Asian countries from the dominance of western powers.

The Asian countries would also work closely with the western members in the AIIB to ensure that AIIB is run professionally and abiding by all the good practices of the World Bank, IMF, and ADB, and to be a credible and sustainable Asian bank. 

The AIIB is a showpiece of Asia, an announcement that Asia has arrived and Asian countries are able and capable of managing the economic development of Asia with Asian expertise, funds and professional management. The primacy of economic considerations should be the guiding principle of the AIIB and not politics. AIIB should not become a political organization and be bogged down with political squabbling if it is to survive the challenges that would fall in its path.
It cannot avoid or totally be detached from the political implications and conflicts in geopolitics. As long as the AIIB can put the economic interests of its member countries above politics, with transparent and good governance, it would be unshakable to the negative political rhetoric and criticisms of its critics and naysayers. 

All Asian countries have a vested interest to see to it that the AIIB is a success and benefits all members. This responsibility rests squarely on the shoulders of the emerging Asian economic power houses, in China, India, South Korea, in Russia and in the central and south East Asian countries.
The author is a political observer from Singapore.

45 comments:

Veritas said...

The world bank and IMF are 2 weapons of western imperialism, out there to loot, and conquer hapless state. During economic crisis, the IMF/world bank will prescript toxic medicine, and the recipient will be first killed by chemo.

Also IMF/world bank loan for development utmost end up entirely into western companies. The loan recipient need to hire western consultancy and western companies for the project, and the consultancies, which are very well connected politically, skim a large part of the monies, intended for the poor.

They also come with exorbitant terms, and these terms are often backdoor to destabilize a country.

The Chinese way of aid is different. Chinese give loan, and many of the loan are targetted at infra-structure. These infra-structure are being build at very high efficiency. And it come without terms.

While Chinese way of aid is not without bad, it is vastly superior to world bank/IMF. I see the world bank/IMF losing a lot of influence to the Chinese.

Veritas said...

The IMF is a particularly evil beast out there for neo colonialism. During the height of 1998 financial crisis triggered by western institutions attacking Asian currency, the IMF prescribe a highly noxious toxic.

First thing is to liberalize the market of the victim. Problem is during crisis, the asset price drop like crazy. The mandate of IMF effectively open up a door that well capitalize western capitals are able to buy out the fire sale Asian asset.

Anyone who voice dissent on top of economic nationalism are denigrated as protectionist.

It was then that Korean indigeneous companies are being snapped up by the west, who are themselves currency manipulator and creator of the crisis.

The next thing is to impose austerity, on the backdrop of deficit and massive capita outflow. The burden of austerity falls disproportionally on the peasant, creating massive layoff, and widespread suffering.

On the surface, it is right to impose financial discipline. Questions is are there other tools, or is the financial strain of victim countries "real" or "virtual", or just merely transient?

Malaysia Mahathir capital control has successfully defy IMF. After the transitional budget woes, Malaysia is able emerge relatively unscarred and having a relatively healthy budget few years later.


Chua Chin Leng aka redbean said...

The AIIB will give Asian countries an alternative and they could see with their eyes wide open the terms offered by AIIB against IMF/World Bank and ADB.

Asian countries are now free to choose who they want to borrow the money from. And they will go to the one with the better terms.

Ⓜatilah $ingapura⚠️ said...

The TV series "The Magnificent 7" was a big hit when many of us growing up in the 60's and 70's. It was even remade in the late 90's. The Mag 7 epitomises and ROMANTCISES the American spirit: wild, individual, romantic, camraderie, the willingness to delive "justice", exploration, innovation, humour...and a big "Rah rah rah, fuck yeah we're the USA", ala Donald Trump rally.

So why in the fuck did the organisers of the Opening Ceremony of the AIIB use The Theme From The Magnificent 7 (unavoidably "American" in its identity) for the Opening Ceremony of the AIIB and have Prez Xi walk up to the podium to this patently-obvious AMERICAN theme...

Big fucking mistake on the part of the organisers.

Other than that...where there is BIG money, there eventually will be corruption. That's A GIVEN, and nothing can change that.

Can you imagine Indonesia or Malaysia borrowing from the AIIB for their "Bumi-structure" projects? Do you think some officials will "kapor" some money? How about lending to Thailand, or Pinoy Land (The dystopian Disneyland of Asia)....wah lau!

But...I don't mind corruption. It is to be expected when there is absolute trust in the absolute power of elected and non-elected state officials. Occasionally to get things done, you have to bribe key people in power and authority...that's life, and this is ASIA. πŸ˜‚πŸ‘Š The AIIB is going to challenge the World Bank and the IMF for "dominance", and at the end of the day, it is a good thing.

Chua Chin Leng aka redbean said...

FIFA has been exposed. Would IMF/World Bank and ADB be exposed?
The AIIB is created for a very different agenda, to provide an alternative bank, fair, just and better than the existing institutions. And it has many European countries to keep an eye on it.

In the long run it may become like the IMF/World Bank of ADB. In the mean time it has a mission and will be watched and managed to serve that mission. It is very unlikely or difficult for it to turn corrupt overnight before doing what it sets out to be. And like the other 3 banks, with so many countries watching, no so easy to turn to the dark side, but possible. Not now. It wants to prove itself as the good guy.

Anonymous said...

So how will AIIB help Singapore?

Or Singapore can only be ruled by PAP and helped only by foreign talents, and not AIIB or what not?

Anonymous said...

Singapore so rich no need AIIB. Singapore can help AIIB by giving more money to AIIB.

b said...

Competition improves value and up the game. Its always good to have something to rival the us hegemoney.

Anonymous said...

Lee Hsien Loong already promised Xi Jinping $1 Trillion from CPF money & GIC/Temasek to put into AIIB. Sure can make money one. Unlike when Ho Jinx put our money into UBS and Chinese banks.

Anonymous said...

// Asian countries now have an Asian bank financed mainly by Asian countries providing funds for infrastructure development in Asia.//


If city of sins become insolvent like Greece one day, do YEW think AIIB big enough to "save" it, let alone the whole of Asia?

Anonymous said...

With a horrible man having kicked the bucket ( thank goodness ) for less than one year, the economy already wobbling?

Anonymous said...

Aung Juan Soon Chee is correct, horrible man had let duds in place ( everywhere ) ...... now witnessing the consequences?

Anonymous said...

Humkia everyday obsessed with eating hum, from a fish ball stick .....?

Anonymous said...

With his horrible ( hand holding ) guardian gone, he can do whatever ( nonsense ) he wanted all along since childhood?

Anonymous said...

Nobody to rein him in now?

Anonymous said...

Everyday eat fish ball stick ......oops ...... hum?

Anonymous said...

Somemore the sticky residues left on his dirty face ......?

Anonymous said...

Xi Jinping must be laughing how cum got such a ηͺε›ŠεΊŸ?

Anonymous said...

// It cannot avoid or totally be detached from the political implications and conflicts in geopolitics. //

The ultimate elephant in the room in this era is not even politics .....?

Anonymous said...

It is the collapse of the Keynesian economics?

Anonymous said...

An economics of monetary and fiscal stimulus taken to the extremes since 2006 ?

Anonymous said...

Keynesian economics was "born" 7 years into the Great Depression in 1936?

Anonymous said...

Its revolutionary thoughts on using fiscal and monetary policies to drive short term aggregate demand and economic growth helped pull the world out of the Great Depression?

Anonymous said...

Great Depression 2.0 was averted in 2008/ 2009 with the concerted deployment of zero or near zero interest rate monetary policy, massive money supply injection and huge fiscal stimulus?

Anonymous said...

But can Keynesian economics indefinitely defy gravity?

Anonymous said...

Or Law of Diminishing Marginal Returns?

Anonymous said...

Can Keynesian economics continue to be as effective in future ( coming soon? ) GFC 2.0 as in last 2008/ 09 GFC?

Anonymous said...

// This responsibility rests squarely on the shoulders of the emerging Asian economic power houses, in China, India, South Korea, in Russia and in the central and south East Asian countries.//


The last thing on the Russian minds is to make AIIB succeed or not succeed?

Anonymous said...

The Russians are fighting for their own lives?

Anonymous said...

Their national budget and economy are built around world oil prices at USD 75 to USD 100?

Anonymous said...

Their foreign reserves are down from USD 500 billion to now about USD 300 billion over 2014 and 2015?

Anonymous said...

Can AIIB turn around to bail the Russian out in the event the oil glut and price collapse persist into 2017?

Anonymous said...

// The challenges faced by the AIIB are more political than economics. //


Many coastal manufacturers in China are struggling to stay afloat?

Anonymous said...

Would not China be too preoccupied with its own internal ECONOMIC problems to divert attention to help irritating neighbours such as pinoyland?

Anonymous said...

The talk of ( China's futher ) RRR and interest rates cuts are futile bcos basic economics would tell YEW business confidence generally far outweighs any decline in interest rates?

Anonymous said...

The RMB 4 Trillion fiscal stimulus was a mistake by the ( greedy ) Hu/ Wen team and Uncle Sam already LAID many "( booby ) traps" to ensure China "suffers a ( far ) worst (economic ) fate" than Japan did in the past 2.5 decades?

Anonymous said...

Many construction related heavy industries are as good as half dead?

Anonymous said...

Devaluing the RMB in the past few months was a ( desperate ) move to save many labour intensive export industries from failing?

Anonymous said...

With many coastal manufacturers in serious cash flow issues and some unable to pay ( their workers ) salaries ( on time and/ or if ever ) much less mentioning bonuses before the coming lunar new year, mass labour unrest could see the Chinese in ( deep ) trouble throughout 2016?

Anonymous said...

The cascading and social effects would likely be devastating. .....?

Anonymous said...

Very soon the ripples would reach the coastline at Marina Bay and move in land .....?

Anonymous said...

The elites always say they plan long term .....?

Anonymous said...

But would any policy maker ( in his right mind ) contract the spending in the economy at this point in time on the verge of a potential GFC 2.0?

Anonymous said...

The "die YEWR own business" planners just did that on 1 Jan 2016?

Anonymous said...

Can YEW believe it?

Millions $$$$$$$$$$$ own self pay own self elites shooting sinkies economy in its own feet .....?

A gazillion face palms oso not enough?

Yew decide?

How many more million billion trillion quadrillion gazillion face palms just to vilify such kongcum ( stupidity on a universe scale )?