Dan Steinbock — The Beginning of the AIIB Epoch

Emergence in a complex adaptive system. Adaptive rate and return on coordination increasing.

The launch of the Asian Infrastructure Investment Bank heralds a new era in which international multilateral institutions are no longer owned, controlled and operated by advanced economies alone.

For years, the G7 nations have pledged substantial governance reforms in international multilateral institutions, such as the International Monetary Fund, the World Bank and the Asian Development Bank. But the promises were left unfulfilled, not least because these organizations are dominated by American, European and Japanese interests, as reflected by their voting quotas, investment allocations and the nationalities of their leaders.

In this context, the China-proposed Asian Infrastructure Investment Bank represents the needs of emerging countries which have been failed by the international multilateral institutions that were created and remain frozen in the mid-1940s...

Over the past few years, the White House has seen the BRICS’ New Development Bank as a potential threat to the existing multilateral organizations. It is pushing for a trans-Pacific trade bloc, which excludes China. And it has opposed the reserve currency status of the Chinese yuan.

As a result, senior US figures have argued that Washington has mishandled its response to China’s efforts to serve as a “responsible stakeholder” in the world economy. Among others, former secretary of Treasury Lawrence Summers has said the US cold-shouldering of the AIIB may be recalled as the moment America “lost its role as the underwriter of the global economic system”....

Economonitor
The Beginning of the AIIB Epoch

Dan Steinbock | research director of international business at the India, China and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and EU Center (Singapore)

The original version was published by China Daily on June 29, 2015.

See also

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