Aiib Why Now?

[Hybrid Ambassador]

In a rare open disagreement between London and Washington, aligned on virtually any major foreign policy issue over the past decades, Britain has become the first major Western government to apply for membership in the Chinese-led Asian Infrastructure Investment Bank (AIIB), an initiative bitterly opposed by US foreign policy makers. By announcing Britain's intention to be part of the Chinese-led bank, David Cameron has made a bold move that is proof of a far more sophisticated understanding of global affairs than on the other side of the Atlantic. Other major economies such as Germany, France and Brazil should follow Britain's lead.
At the AIIB's signing ceremony last year, twenty-one countries signed the founding document, including all major actors in South-, Central- and South-East Asia, aside from Kuwait, Oman and Qatar. China plans to contribute $50 billion US-dollars, hinting that it may double the amount.
There is an undeniable demand for fresh capital to modernize Asia's infrastructure. In a much-cited study, the Asian Development Bank (ADB) said that the region needed $8 trillion US-dollars of investments in infrastructure in the current decade to put Asia on a sustainable growth trajectory. Yet particularly countries such as Myanmar lack the means to do so, and existing institutions such as the Asian Development Bank cannot satisfy existing demand. The ADB lends little more than US$10 billion a year for infrastructure development. Its president is traditionally named by Japan, even though China is by far the region's largest economy.

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