China, along with 20 other nations, agreed to launch a new international development bank last week. The Asian Infrastructure Investment Bank (AIIB) seeks to meet the region's ravenous hunger for infrastructure — a critical bottleneck if Asia is to realize its full economic potential. That ambition is hard to fault.
But there are fears that the AIIB is aimed at providing a counterweight to existing institutions like the World Bank and the Asian Development Bank (ADB) and undermine prevailing norms on international lending.
Asia needs infrastructure. The ADB has estimated that East Asia will need $8 trillion in infrastructure investment — roads, ports, airports, power generation projects, telecommunications and the like — by 2020 to ensure that its economic potential is met. Indonesia is reckoned to need $230 billion; the Lower Mekong Subregion — a group that includes parts of Vietnam, Laos, Cambodia and Thailand — is estimated to need $50 billion.