18 April 2015

Is the Asian Infrastructure Investment Bank Good for India?

APRIL 15, 2015

Coal power looks to get a boost, but New Delhi might not be thrilled signing on to the China-dominated lender.

Is the Asian Infrastructure Investment Bank Good for India?
A symbolically important deadline passed on March 31, 2015, and with it a new world order might just be taking shape. It was the date that the Chinese had set as a deadline for those countries wishing to sign up as founding members of the new Asian Infrastructure Investment Bank (AIIB). The AIIB aims to supplant or at least challenge the hegemony of the Bretton Woods institutions, in particular the World Bank and the International Monetary Fund (IMF). For India, in particular, AIIB may have a significant impact on the energy choices available, by lifting Western-imposed constraints on how the World Bank lends.

The AIIB also represents an important symbolic defeat for the United States, which had made no secret of its opposition to the new body. Bucking pressure from Washington, some of America’s major allies including Britain, India, and several other European and Asian countries have signed on or signaled they wish to join. India was one of those countries present when the initial Memorandum of Understanding was unveiled by Chinese President Xi Jinping. In fact, Japan is the only major country besides the United States that thus far has opted out, and that has far more to do with Japan’s apprehensions about the rise of China in a region it has long dominated than any pressure that might have emanated from Washington.

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