Apr 1st 2015
Thesis: AIIB will positively influence on the third world by supporting funds and technology and the world economy by becoming a rival of IMF and World Bank.
The AIIB (Asian Infrastructure Investment Bank) expands its memberships from European countries to Asian countries despite the U.S. government’s strong objection. Last Tuesday was the deadline for signing up as founding members and numerous countries such as the United Kingdom, France, Germany, South Korea and Australia joined the AIIB. Robert Zoellick, former president of the World Bank, says that the establishment of AIIB means the failure of Obama administration both on policy and on execution (Wall Street Journal). First, the U.S. government concerned about Chinese ambition to remake the world’s multilateral landscape by reducing the impact of the World Bank and tried to convince allies not to join in. However, I agree with Zoellick’s idea that the U.S. should realize the existence of the AIIB and try to become a friend. “If I had been at the World Bank, I would have tried to embrace the AIIB as a partner (Zoellick).” Also, on execution, he pointed out that the administration only pressured its allies and partners, but didn’t provide an alternative. For example, for South Korea, the AIIB is really attractive because China, the founder of the AIIB, can support South Korea in some issues related to North Korea and expand the its influence to the world. Since the U.S. didn’t succeed in convincing the Korean government with specific alternatives, there was no choice for the Korean government and for other countries as well.
Personally, I support the establishment of AIIB because I think it will influence positively on the third world’s economy as well as on the world. More specifically, it is true that there are many developing countries in the Asia which need funds for building infrastructures. IMF (International Monetary Fund) and ADB (Asian Development Bank) were the only sources that those governments can borrow some funds; however, both institutions are led by Western countries which usually do not get though the economic growth and do not comprehend the Asian culture. I think AIIB led by China and other Asian countries will offer better options for developing countries since most members already got through the growth period. Also, it is possible that members in AIIB can provide technologies as well as their past experience and strategies.
Although the U.S. concerns about the transparency problem in AIIB, European countries like France, Germany and England and South Korea form the East Asia will control the structure. And I think the U.S. also can be another supervisor as Zoellick argues, “we should press the Chinese to perform to institute those institutions in ways that would be supportive of international economic growth.”
Finally, it is time to change the U.S. government’s recognition of AIIB. The institution is already organized successfully and many countries are positive to its impact. I think AIIB will boost the economy in Asia by providing funds with lower interest rate (I agree with the statement that AIIB lowers the interest rate of IMF, ADB and AIIB itself because of competition) and will balance the world financial market which was led by the U.S.