LAST Friday the Asian Infrastructure Investment Bank (AIIB) was inaugurated with the signing of a memorandum of understanding at the Great Hall of the People in Beijing. Twenty other nations in Asia participated, including the Philippines on the Pacific Ocean, Qatar in the Middle East and nearly every country in between the two. As its name implies, the AIIB will provide loans and funding, primarily for infrastructure projects in Asia.
The AIIB was proposed a year ago by China, which will own and fund 50 percent of the bank, as an alternative to both the World Bank, which is dominated by the United States, and the Asian Development Bank (ADB), which is under the wing of Japan.
By establishing the AIIB, China had just stuck its finger in the eye of those two Group of Seven countries.
The media have played up the fact that three countries that should probably be participating in the AIIB—Australia, South Korea and Indonesia—were absent. That is not surprising in the least.
Australia may depend on the Chinese to buy its minerals, but the Australian dollar lives only at the mercy of the US. The US Federal Reserve could turn the value of the Australian dollar into something less than used toilet tissue at any time. The Australian Financial Review said US Secretary of State John F. Kerry had personally asked Australian Prime Minister Tony Abbott to keep Australia out of the AIIB.
While the world is all excited by the election of Indonesian President Joko Widodo, the US Central Intelligence Agency (CIA) has been “influencing” Indonesian politics even before he was born. In 1958 the CIA directly supported military rebels opposed to then-President Sukarno because of his close political alliance with the Communist Party of Indonesia or PKI. It is an open secret how closely the CIA worked with the Indonesian military through the decades, and Widodo is the first nonmilitary-linked leader in Indonesia’s history. For now Widodo is always 15 minutes away from being “asked” by the military to go back to being a furniture salesman.
The only thing that keeps the 1 million-strong Korean People’s Army from turning Seoul into its own rest-and-recreation center is the US having 30,000 American troops stationed in South Korea.
China, along with Russia, Brazil and India, has been pushing for an alternative global currency to the US dollar. The AIIB is a major step in that direction. While the AIIB will not eliminate the need for the ADB and the World Bank, the AIIB will significantly lessen the power of these two banks in Asian countries over time. Furthermore, the AIIB will increase China’s influence.
Philippine relations with China are best described by the phrase “It’s complicated,” but our full participation in the AIIB is important, both domestically and internationally.
Image credits: Jimbo Albano