Haunted by debt and stagnation, the Western nations are not likely to adequately support emerging Asia – not to speak of emerging Latin America, Africa and the Middle East – that suffers from low living standards but enjoys higher growth. Seen in this context, the most recent promises by the World Bank and the ADB (or the IMF) to take steps to increase their lending capacity is seen as too little too late in Asia.

Not only China but most of Asia and the rest of the emerging world are justifiably skeptical about existing international institutions in which they feel a lack of ownership.

Regional bank, global blueprint

The U.S. lobbying campaign has pushed its vital allies – including Australia and South Korea – in a difficult spot. While both continue to benefit from economic cooperation with China, each also relies on U.S. support in defense. In public, both have praised the proposal and promised to consider it; behind the fa?ade, each is being pressured to shun the AIIB. In contrast, Singapore has already signed up with the bank initiative.

Overall, the AIIB could comprise some 22 countries in East, Southeast and South Asia, including several oil-rich nations in the Middle East, which China sees as Western Asia.

Despite half a century of lofty pledges, neither Washington nor Brussels has been too eager to live up to their promises to allow greater Chinese and emerging-economy participation in the existing multilateral institutions.

That’s why the proposed AIIB is a great experiment to boost prosperity and hope not just in Asia but in all emerging and developing countries. It could provide a blueprint for emerging and developing economies in other world regions – even within advanced regions.

The proposed regional infrastructure bank is not an effort to overthrow the existing multilateral institutions, a geopolitical power play, or an attempt at a race to the bottom. It is an initiative of the emerging Asia to augment the existing institutions, to deliver the promise of the region, and to offer an example for the rest of the world, including the advanced West.

Dr. Dan Steinbock is Research Director of International Business at India China and America Institute (U.S.A.) and Visiting Fellow at Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more see: http://www.differencegroup.net

This article was first published at Chinausfocus.com. To see the original version please visit http://www.chinausfocus.com/finance-economy/time-for-an-asian-infrastructure-investment-bank/

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