During the Cold War, superpowers competed with nuclear warheads; a less apocalyptic weapon exists in globalization. It’s the multilateral bank, an instrument China years for in order to challenge the US’ supremacy. Albeit notably late, China wants to use its resources with acumen. It realized that it couldn’t accumulate resources infinitely, buying public debt overseas. There’s a strictly political use to their efforts: this is the venture Beijing wants to start, with all the uncertainties dictated by its inexperience. The objective is relatively simple: to help developing countries and make them allies in the inevitable contrast with the United States. The first attempt took place in Brazil last July. During the five BRICS’ summit in Fortaleza, they decided to institute a “New Development Bank” to help emerging and developing countries. Not surprisingly, its headquarters will be in Shanghai. India will act as president, Russia, Brazil, and South Africa as top management. Initial capital will be USD$50 billion; in addition, a reserve fund of USD$100 million will be created to control eventual crises in the balance of payments. “This will ensure security, a sort of safety net for BRICS and other countries,” said President Dilma Roussef. Ironically, the endowment is expressed in dollars, the very currency they’re trying to oppose. In fact, its volatility is out of their control and Washington’s monopoly, while the distribution of international funds will happen via the World Bank and the IMF, which is to say the institutions frequently accused of perpetuating Euro-American power in a world subjected to strong economic repositioning.
The latest Chinese attempt was the launch of the “Infrastructure Bank,” a forthcoming creation that should grow China’s role in Asia. Via an initial commitment of USD$50 billion, Beijing intends to deny criticisms that it’s exercising de facto economic dominance without interpreting the region’s development needs. The institution should finance a network of transport, communication, and the access to new energy sources. For China, involving donor countries is essential to not spread the perception of a new order based on its financial supremacy. Japan—for obvious military-political reasons—is insensitive to the effort. Australia and South Korea are willing to negotiate; Singapore has already offered its accession. In any case, the United State’s opposition burdens the institution’s future, which has been expressed unofficially but understandably. The new bank would damage the Asian Development Bank’s power, the stronghold of multilateral support controlled by Washington and Tokyo. For now, opposition has appeared as social and humanitarian. The US fears that the new bank will allow construction that violates ethical standards that forcefully remove population for the building of dams. They express their concerns for environmental standards, the excessive use of fossil fuels, and allocation procedures that should guarantee transparency, equal opportunities, and the absence of corruption. We’re witnessing the initial skirmishes, where positions of principal hide the substance of the contrasts. During their next meeting in Beijing on November 12, it’s very likely that Xi and Obama will discuss the bank’s more crystalline value: a step forward in the battle to find more advantageous equilibriums.
