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.

The ADB, the region’s premier lending institution to low- and middle-income countries, lends just $10 billion a year for infrastructure. The Chinese government, which has spearheaded the campaign for the new institution, is expected to put up about half of the AIIB’s $100 billion in capital, and will host the new bank in Beijing. While China is no doubt eager to extend its influence as the host and moving force behind the bank, it rightly claims that the real impetus — in addition to filling the infrastructure need — is an attempt to make financial governance more representative of the global distribution of power in the 21st century.

Today, the World Bank and the International Monetary Fund (IMF) continue to be directed by the trans-Atlantic states. The United States always picks the head of the World Bank, while Europe selects the director general of the IMF.

China, the world’s second-largest economy, has just a 3.8 percent voting share in the IMF, roughly the same size as Italy, and less than a quarter of that of the U.S. There have been calls for — and agreement to — change the various voting rights, but progress has been glacial. Chinese frustrations prompted Beijing’s drive to create the AIIB.

Similar restrictions are evident in Asia: For example, a Japanese always heads the ADB.

Another reason for frustration is the conditions for loans from these “mainstream” financial institutions. Borrowers must agree to meet standards of transparency, labor and environmental protection, demands that frequently irritate recipient governments and smack of financial imperialism.

Acutely conscious of foreign attempts to influence its own decision-making, China’s own lending is considerably less onerous. Chinese President Xi Jinping proudly notes that his country lends money with “no strings attached.”

A fear that Beijing is attempting to weaken the standards of global governance has prompted the U.S. and other Western governments to keep their distance from the AIIB.

There are reports of an active effort — quiet lobbying — by Washington and like-minded governments to keep other nations from joining the AIIB. U.S officials deny outright opposition to the initiative; they counter that they are merely raising questions about how the new bank will operate.

Xi has responded by noting that the AIIB will “follow multilateral rules and procedures, and “learn from the World Bank and the Asian Development Bank and other existing multilateral development institutions in their good practices and useful experiences.” The invitation to any and all countries to join the venture is also intended to deflect such criticism.

Indeed, the limited size of the bank’s capital and best lending practices will mean that the AIIB will complement — not replace — existing financial institutions. Projects are likely to be co-financed, which will dilute the impact of any separate AIIB standards.

Moreover, the existence of the bank should also diminish China’s own direct lending. One Chinese expert suggests that multilateral lending will be less prone to corruption than that financed directly by China.

Skepticism persists, nevertheless. The absence of a resident board of directors will make oversight difficult. China may seek a new allocation of voting rights in existing institutions, but in no case does any country have the 50 percent share of capital that Beijing will have in this new bank.

In the ADB for example, Japan and the U.S. have less than a 16 percent share each. And when seen in conjunction with the decision to establish a BRICS bank, and the call for a new Asian security architecture that is “by Asians for Asians,” the AIIB does appear to be an attempt to actively promote norms and institutions that erode the legitimacy of existing governance structures.

In truth, the AIIB is too small to truly damage those other institutions. Any real harm to their legitimacy will be self-inflicted. That is why their governance structures must be reformed to make them more representative of the current distribution of global power.

Lending that is indifferent to norms that protect the interests of all citizens — that guard against corruption, protect the environment, and safeguard human rights — will ultimately collapse under the weight of the misbehavior it permits.

Japan, the U.S. and other governments skeptical about the AIIB should join the bank to ensure that it does not undermine the standards they support. A failure to engage allows China to do as it pleases.

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