India, Iran and Israel joined. Europe’s leading economies – France, Germany, Italy, Switzerland, and United Kingdom – are approved members. Russia is in. Saudi Arabia and the United Arab Emirates are on board. Australia and South Korea are confirmed. Japan has allocated $1.5 billion for AIIB membership, though Tokyo is assessing AIIB’s governance framework and will decide in June. Canada is considering. North Korea’s application was rejected. Currently, 57 countries are confirmed founding members. The United States stands alone.
Critics of the U.S. decision not to join see Washington sidelined as allies jump on the AIIB bandwagon. Proponents of Washington’s position, mainly Obama administration officials, decry the absence of transparent governance standards and competition with the World Bank and Asian Development Bank, even though both banks have endorsed the AIIB. The White House’s concerns over AIIB’s environmental and social responsibility framework, though valid, miss the bigger picture. What is the strategic significance of the AIIB for the next US president and US rebalance to Asia?
Geopolitics. A U.S. president with a clear vision of U.S. leadership in Asia would see the geopolitical context of the AIIB. In tandem with the New Silk Road, Maritime Silk Road, and Air Defense Identification Zone, the AIIB reflects the symbiosis of Chinese soft power prowess and hard power calculations. Both serve to fortify China’s growing stature and leverage in recasting the region’s strategic landscape with China at the epicenter. The decision of 57 countries to join the AIIB suggests that a tectonic shift toward a new world economic order is underway. China has surpassed the United States as the world’s largest economy in purchasing-power parity terms and will eventually bridge the GDP gap with the U.S., according to U.S. Department of Agriculture data. It is, therefore, increasingly incumbent on Washington and the next administration to ascertain how the United States will shape this emerging Asia-centric global economic system. To this end, moving the Trans-Pacific Partnership (TPP) – the crux of the U.S. rebalance to Asia – forward requires the White House and Congress to prevent local politics from trumping national economic interests, and constraining long-term geopolitical leverage in the region.
Read Full Article HERE