AIIB starts new era for Asia

Workers walk across the stage before the opening ceremony of the Asian Infrastructure Investment Bank (AIIB) in Beijing Jan 16, 2016.[Photo/IC]

After three years in the making, the Asian Infrastructure Investment Bank (AIIB) officially opens for business on Jan 16, 2016. The AIIB is a milestone for Asia; it’s for Asian countries to take charge of their futures going forward. Asian countries now have an Asian bank financed mainly by Asian countries providing funds for infrastructure development in Asia.

The positive contribution of an Asian bank to finance infrastructure development, energy, and transportation in Asia is clear and obvious. The encouraging international membership is a vindication of the need and the niche role that AIIB could play for its Asian members.

The participation of many western economic powers gives credence and affirmation that the AIIB is on the right path and would be an essential organization in the same league as the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB). On a positive note, the AIIB would play a complimentary role to these existing institutions, to provide financing and fill the gaps that the existing structure and organizations could not do. The needs of Asian countries to develop their coal, thermal, and hydro power infrastructure excluded by the Bretton Woods Agreements would now be served by the AIIB.

The challenges faced by the AIIB are more political than economics. The opposition from the American and Japanese corner arises from their perception that the AIIB is a challenge to their dominance and monopoly in the existing world order.

No one can deny the great economic benefits that the AIIB would bring to Asian countries. The political rhetoric is just that and economic considerations would rule the day as was seen by the last minute entry of the Philippines becoming a founding member. No Asian country would want to be left out from benefiting from an Asian Bank with a primary role of supporting the infrastructure development of Asian countries.

Obstacles, real and imaginary, would be placed by beneficiaries of the old world order into the path of the AIIB. It is important that Asian countries like China, India, and Russia would put their priorities right, to see to it that an Asian bank could succeed under their leadership to serve Asian interests and the ascendance of Asian powers, to free Asian countries from the dominance of western powers.

The Asian countries would also work closely with the western members in the AIIB to ensure that AIIB is run professionally and abiding by all the good practices of the World Bank, IMF, and ADB, and to be a credible and sustainable Asian bank.

The AIIB is a showpiece of Asia, an announcement that Asia has arrived and Asian countries are able and capable of managing the economic development of Asia with Asian expertise, funds and professional management. The primacy of economic considerations should be the guiding principle of the AIIB and not politics. AIIB should not become a political organization and be bogged down with political squabbling if it is to survive the challenges that would fall in its path.

It cannot avoid or totally be detached from the political implications and conflicts in geopolitics. As long as the AIIB can put the economic interests of its member countries above politics, with transparent and good governance, it would be unshakable to the negative political rhetoric and criticisms of its critics and naysayers.

All Asian countries have a vested interest to see to it that the AIIB is a success and benefits all members. This responsibility rests squarely on the shoulders of the emerging Asian economic power houses, in China, India, South Korea, in Russia and in the central and south East Asian countries.

The author is a political observer from Singapore.

The opinions expressed here are those of the writer and don't represent views of China Daily website.