Geopolitics of Finance
April 4, 2015 1:49 PM   Subscribe

Tired of waiting for IMF and World Bank recognition of its financial muscle, China stepped aside to lead the creation of an Asian Infrastructure Investment Bank (AIIB) inviting the rest of BRIC to join as cofounders. Unexpectedly, there's been a bit of a global stampede to get in an application as founding member. Here's a helpful infographic. And here are some widely divergent points of view pontificating on the geopolitics of finance.
posted by infini (18 comments total) 22 users marked this as a favorite
As a citizen of the world, I am overjoyed at the creation of an alternative to the IMF.
posted by mafted jacksie at 2:13 PM on April 4, 2015

Please forgive my ignorance, and I admit to not having read all the links yet, but, would this be any threat to the US dollar as the world's reserve currency?

Even if it's not, there has to be an enormous number of people in the USA who are furious over this.
posted by InsertNiftyNameHere at 3:45 PM on April 4, 2015 [1 favorite]

Let me guess, is it oligarchs all the way down?
posted by valkane at 3:57 PM on April 4, 2015 [3 favorites]

Unlikely to be any threat to the US dollar as the world's reserve currency, but definitely pisses off people in the USA given that the US has been pretty dominant in all other int'l dev banks. Definitely extra interesting in how it will limit reforms/agendas pushed by the current crop of int'l banks (offering financing contingent on other -- sometimes political -- qualifications) and if it will speed up the transition of WB and ADB toward more IFC or EBRD-like institutions.
posted by auggy at 4:16 PM on April 4, 2015 [2 favorites]

Can the US apply for help? Our infrastructure needs some investment.
posted by Drinky Die at 6:10 PM on April 4, 2015 [5 favorites]

Can the US apply for help? Our infrastructure needs some investment.

Wouldn't it be great if they require strict reformations of Congress and the electoral system to promote stability and an appropriate environment for economic development?
posted by Karaage at 6:38 PM on April 4, 2015 [14 favorites]

The Obama administration more or less foresaw this problem years ago. That's why back in 2010 it negotiated a deal to increase China's role in the IMF and World Bank...The problem is that Congress keeps blocking the plan at the behest of conservative activist groups.

So Obama had a good plan and the conservatives blocked it and things end up worse (for the US). What do you bet they also block passing the Iran agreement and we end up in a terrible war that makes things worse for eveyone?
posted by eye of newt at 9:07 PM on April 4, 2015 [4 favorites]

Maybe this is what's needed to finally.....

ah, who am I kidding? This doesn't really do much except serve as a signpost on the way to the end of the dollar...
posted by MikeWarot at 9:23 PM on April 4, 2015 [1 favorite]

However, China has insisted that AIIB will be rigorous in adopting the best practices of institutions such as the World Bank.
Oh... goody!

I don't know why all this gives me the feeling like the Great Game isn't going away, just shifting battlefields temporarily.
posted by vanar sena at 2:25 AM on April 5, 2015

The Great Game never ended. It's just the players who've changed.
posted by Apocryphon at 11:06 AM on April 5, 2015 [1 favorite]

I really want to hear some insider accounts on this, hope something percolates out soon. Another development bank isn't such a big deal, who knows whether it will end up doing anything useful. But for so many close US allies to so publicly cross the US in this way is startling. I expected the BRIC countries to be on this, and the bits and pieces of the old nonaligned movement. To see the UK, Germany, S. Korea, and Taiwan of all places jumping on board means some people in Foggy Bottom are having a horrible week. The White House must be furious about this.
posted by Wretch729 at 11:30 AM on April 6, 2015 [1 favorite]

Weirdness. That first link in WaPo was written by someone who went to my High School. Been down rabbit hole of articles and name sounded familiar.
posted by infini at 2:39 PM on April 6, 2015

China cannot believe its luck over new investment bank
Chinese President Xi Jinping cannot, however, celebrate just yet. While 2015 may have started out as an annus mirabilis for Beijing, an evolving diplomatic mess in Sri Lanka is a reminder of how quickly geostrategic momentum can change.

China’s crisis in Colombo is largely of its own making, having bankrolled some $5bn-worth of infrastructure projects on the assumption that Mr Xi’s erstwhile ally there, Mahinda Rajapaksa, had as firm a grip on power as the Chinese Communist party does.

Mr Rajapaksa’s shock election defeat in January has exposed China’s Sri Lankan infrastructure investments — and related lending packages — to unwelcome scrutiny from the new government in Colombo. If proven, the accusations there of a lack of transparency and worse will perfectly illustrate Washington and Tokyo’s worst fears about potential governance lapses at the AIIB.
China will struggle to keep its momentum
posted by kliuless at 11:19 AM on April 8, 2015 [1 favorite]

Chinese Finance Ministry has released the official list of founding members. Other countries welcome as ordinary members.
posted by infini at 9:58 AM on April 15, 2015

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