Asian Infrastructure Investment Bank
In October 2014, twenty-one Asian nations discussed and signed on to create a new development bank for Asia, the Asian Infrastructure Investment Bank (AIIB). China, supported by Vietnam and other Asian countries, began the initiative with an aim to boost infrastructure investment mainly in Asia but also in Africa and elsewhere. Asian leaders expressed frustration with the existing public international banking agencies: the World Bank, International Monetary Fund and the Asian Development Bank.
Objections to the dominant public funding agencies range from the dictatorial control exercised by U.S. imperialism to the onerous terms for borrowing social wealth and the overt interference of the lending institutions into the political, economic and social life of the borrowing country. Another important complaint revolves around the use of the funds of the World Bank and International Monetary Fund (IMF) as bailouts for distressed loans and bonds of private financial lenders. Recent examples are those in Greece and Ukraine where IMF loans go directly into the pockets of private international lenders and not for development projects. Also, it must be remembered that private lending institutions, which dwarf the international financial institutions, are by far and away dominant in the world, with the largest banks each controlling over $1 trillion in social wealth.
New Development Bank
The AIIB reflects initiatives by countries around the world to escape as best they can the suffocating control of U.S. imperialism and its dollar hegemony. Leaders of Brazil, Russia, India, China and South Africa met on July 15, 2014 and initiated the BRICS Development Bank (officially called the New Development Bank) with working social wealth of $100 billion and a reserve pool of another $100 billion. Speeches at the founding conference said the New Development Bank is necessary to counter the dominating control of public and private international financial institutions headquartered in the U.S., Japan and the big powers of Europe.
The AIIB gave a deadline of March 31, 2015 for countries to join as founding members. The initial group of twenty-one members from last October includes:
Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.
U.S. imperialism immediately began an international campaign to denounce the AIIB calling it a Chinese conspiracy to ruin the existing world financial order and impose its own domination replete with corruption and favouritism. The U.S. together with Japan, which is still under U.S. military occupation, began to exert pressure on everyone to shun the AIIB. The U.S. also sees the new bank as a spoke in the wheel of its effort to isolate China as it diverts attention away from the U.S.-proposed free trade zone, the Trans Pacific Partnership, which excludes China. Many personages in the international financial community have expressed horror at the irrational antics of U.S. imperialism and its fawning media such as the New York Times in opposing the AIIB.
Former World Bank managing editor Kevin Rafferty in a recent item in the Japan Times writes, “China’s plans to set up the Asian Infrastructure Investment Bank have demonstrated that the United States has lost its way and is rapidly forfeiting claims to global financial, economic, political and moral leadership. Questions also have to be asked about the wisdom and leadership of the World Bank and Asian Development Bank and about the chief Asian supporter of the U.S. — Japan.”
U.S. pressure failed to stem the tide, as country after country applied to join including even the UK. On this development Rafferty writes, “From the moment the project was mooted, Washington’s responses have been woeful, more or less wishfully hoping that the bank would go away. Even in mid-March, U.S. Treasury Secretary Jack Lew demonstrated his failure to understand the wisdom of that old adage, if you are in a hole, stop digging. Lew urged European countries not to join the AIIB. He was too late: Germany, France, Italy and Luxembourg had already announced they were rejecting U.S. opposition and would join the United Kingdom in becoming founder members of AIIB before the March 31 deadline.
“The weeks before Lew’s comments, an unnamed senior U.S. official took the unusual step of talking to the Financial Times explicitly to condemn the U.K. for breaking ranks and announcing it was joining AIIB. ‘We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,’ grumbled the American official.”
Countries joining the initial twenty-one founding members in 2014: Indonesia, Maldives, New Zealand, Sri Lanka and Thailand.
Countries joining in 2015 up to March 26: Austria, France, Germany, Italy, Jordan, Luxembourg, Saudi Arabia, South Korea, Switzerland, Tajikistan, Turkey and United Kingdom.
The Harper government to this point has refused to join the AIIB but has refrained from repeating the disparaging comments coming from the U.S. TML Weekly will carry a report when the AIIB founding documents are published.
1. China announced on March 28, the following countries have applied to join the AIIB: Australia, Russia, Netherlands, Brazil and Georgia. This means that U.S. imperialism’s attempt to stop countries from participating in the AIIB has collapsed in failure.