Why the AIIB Matters
The burgeoning membership and growing successes of the Asian Infrastructure Investment Bank (AIIB) have made obvious to the rest of the world one of America’s biggest foreign policy mistake of the past several years – ignoring the importance of the Asia-Pacific countries. Despite President Obama’s calls for an “Asia pivot” at the beginning of his second term, the President and his foreign policy team have began to focus increasingly on the Middle East at the expense of one of the most influential growing regions of the world.
According to the AIIB website, the bank was established in 2014 to bolster investments in developing countries in Asia. In particular, the bank seeks to facilitate dialogue between lender and debtor nations for investments in energy, agriculture, transportation, and urban development; infrastructure that is greatly lacking in developing countries that are unable to find substantial aid from other world organizations like the World Bank or the Asian Development Bank (ADB). While these global institutions include developing Asian countries, they are primarily led by the U.S., or, in the case of the ADB, by Japan, a U.S. ally. In contrast, the AIIB is led by China. The change in leadership suggests Beijing is taking on a much larger international role, indirectly threatening the U.S.’s status as a world power, especially in Asia.
One of the common complaints lodged by the United States is that the AIIB is unclear in its structural organization and objectives, and that it often fails to enforce labor and environmental standards. While it is true that its management structure has yet to be established, analysts agree that the AIIB will soon be up and running by the end of the year, with talks already outlining the major governing bodies. And the United States’ concern for violations of international regulations actually undermines its goals: because the United States refuses to join the AIIB, they are unable to prevent the AIIB from committing international violations from within.
However, the United States has cause enough to remain outside of the AIIB. The ADB recently released data showing that Asian developing nations need approximately $750 billion to develop infrastructure. With the World Bank supplying $24 billion and the ADB supplying $13 billion, it’s clear that the AIIB’s role will only become more difficult in the coming years. Though AIIB supplies $100 billion, the amount needed to improve the Asia-Pacific is still a long ways off. If the United States were to join the AIIB to counter China’s efforts, it would need to provide a substantial supply of aid in order to actually gain influence – aid that Congress is unlikely to give anytime soon.
The primary fault, then, is the Obama Administration’s initial reaction to the AIIB. The United States’ refusal to join an organization concerned with Asia and its following insistence that its allies follow suit denotes an indifferent attitude towards the swiftly changing relationships with regional affairs. China’s economy has rapidly expanded, South Korea remains an exporting superpower, and North Korea’s volatile nature will continue to roil international relations in the near future. Asia as a region is beginning to dominate world politics, and the United States must look towards the East to maintain its superpower status.
- Melinda Chen
Photo: Retina Mail News (Russia)