The Asian Infrastructure Investment Bank (AIIB) is seeing a nice take off with over 40 countries joining up as “founding members.” The Chinese have been locked out of leadership positions in the World Bank, International Monetary Fund, and Asian Development Bank, and plans to pump $800 billion into the Asian marketplaces with the AIIB. The United States and Jaan have not jumped in, according to Quartz because…
The US and other critics question whether the Beijing-led institution will uphold international standards of transparency, debt sustainability, and environmental and social protections, or just turn into an arm of Chinese foreign policy.
These are some pretty serious concerns. I would also question the actions of a bank that has little to no oversight (the Federal Reserve), operated in near total secrecy (the Federal Reserve) for possible foreign interests (the Federal Reserve.) Worrying about debt sustainability — and by that we don’t mean the ability to keep being in debt (well, I’m assuming…) — is also a valid criticism. We wouldn’t want to see a replay of the idiotic policies that have been financial collapses since about, say, 1872… Nor would we want to see the Chinese policy interests affect our nation’s decision making process….as it does now.
The hope seems to be that the AIIB will follow the same standards that MF Global, Bank of America, the Royal Bank of Scotland, Northern Rock, Morgan-Chase, and other financial powerhouses did in 2006. International commerce: Saved!