Philip S. Golub — China rewrites the global rules

Recognising the challenge, the US intensively lobbied allied states in Asia and Europe to stay out of the AIIB, arguing that it would not meet IMF and World Bank standards of transparency, environmental and social responsibility, and democratic governance. The argument would have been more convincing had the IMF not been the arm of coercive Euro-Atlantic discipline for the South. With the exception of Japan, the US proved unable to sway its closest partners.… 

The decision to found the NDB and AIIB is the outcome of a movement building since the 1990s in East Asia and Latin America in reaction to IMF mismanagement of regional financial crises. The 1997-8 Asian crisis convinced many East Asian policy makers that it was time to take the future into their own hands and seek greater autonomy. The creation of the new system has huge implications: the ability to set policy frameworks and maintain international regimes through multilateral institutions is an essential dimension of power in world politics. Former Treasury Secretary Lawrence Summers wrote that October 2014 (when the AIIB was formed) “may be remembered as the moment the United States lost its role as the underwriter of the global economic system….

Multipolar geopolitical political systems based on national sovereignty are potentially much less stable than unipolar systems, but only if the unipolar system is run in the interest of all instead of a hegemon. The US blew this opportunity badly. Now the future is uncertain as power blocs and spheres of interest again form.

Le Monde Diplomatique — English
China rewrites the global rules
Philip S. Golub
ht Yves Smith at Naked Capitalism