WHY THE US SHOULD JOIN THE AIIB
Joel A. Gallo
Our world in the 21st century is continuously buffeted by seismic forces including globalization, climate change and speed of light technological innovation, to name a few. Within this ever-moving context, the ability to improve the livelihoods of citizens around the world, in particular those at the bottom of the socio-economic pyramid, remains an elusive challenge. However, infrastructure has long been perceived as a driving force for economic development due to their purported multiplier economic effects. Reports by multi-lateral agencies and NGOs estimate that within the Asia Pacific region $1 to $2 Trillion of additional investment is needed every year. To that end, the creation of the Asian Infrastructure Investment Bank will fill a much needed investment gap for a region that continues to witness rapid population growth and brisk economic expansion that yearns for modern infrastructure. The AIIB should be seen as a welcome participant working towards a just cause, one that the United States should embrace by becoming a member country.
Rationale for Joining the AIIB
The United States harbors many doubts about the AIIB ranging from: 1) considering the Bank as a tool of statecraft for policymakers in Beijing; 2) China as the founding member holding a disproportionate amount of influence through voting rights; 3) the Bank will not follow international benchmarks for governance, eschewing environmental and safety standards, while shunning human rights and turning a blind eye towards anti-corruption efforts.
However, these reservations are misplaced. China is currently involved in countless of projects – building ports, putting down new roads, laying down railway tracks, digging canals, constructing bridges and tunnels, erecting new skyscrapers on virtually every continent. Through the sheer magnitude of these projects, China is continuously modifying its approach, taking stock of lessons learned to improve future execution. By participating in the AIIB, the United States can help China to further enhance its efforts and upgrade the quality of governance, credit standards and improve the banking culture while simultaneously raise environmental and social standards.
Furthermore, as infrastructure needs around the world are great, the AIIB could conceivable partner up with other developments banks (e.g. Asia Development Bank, the World Bank) to co-fund larger scale projects, providing credit enhancements that would make it more attractive to private sector partners. In this capacity, the United States could act as an honest broker to facilitate such a co-financing structure.
Lastly, future historians may interpret America’s withdrawal from the TPP as a major strategic blunder. Therefore, joining the AIIB, may allow the United States a seat at a table in helping Asia continue to develop its economic future. On balance, the United States has much more to gain from joining the AIIB and shaping its future from within than seeking to exert influence from the sidelines.