The much hyped Asian Infrastructure Investment Bank, new kid on the banking block, opened to a flurry of interest in April/March, as countries fell over themselves to join the newly established 'challenger' to the Western Banking Cartels.
After an initial surge of interest, a bucket-of-cold-water interview with Indonesian Finance Minister Bambang Brodjonegoro suggests the AIIB may be nothing more than a copy-to-China IMF; a wasteful, inept institution that talks big, but ends up causing more problems than it solves.
http://www.wsj.com/articles/china-led-aiib-to-focus-on-big-ticket-projects-indonesia-says-1428647276
In an interview with the Wall Street Journal, Mr Brodjonegoro snuffed any hopes that the AIIB would raise standards of living in recipient countries:
"The proposed Asian Infrastructure Investment Bank will target “big-scale infrastructure projects” only, such as toll roads, power plants, seaports and airports, "
In short, more of the same. Ignorant financiers paying scant attention to solving poverty. We agree that large scale infrastructure is important, but not at the expense of development in the agricultural, water and micro-finance sphere.
Background: Urgent Needs Ignored
Indonesia, Brodjonegoro's home country, is one of the poorest in Asia, where:
"Over 40 million people lack access to an improved water source and more than 110 million of the country’s 240 million population has no access to improved sanitation."
http://en.wikipedia.org/wiki/Water_supply_and_sanitation_in_Indonesia
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Will the AIIB be another bank that claims to help raise standards of living, while paying only token attention to pressing human needs?
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Brodjonegoro claims that the AIIB does not need to focus on smaller scale projects, because the Asian Development Bank already has it "covered":
"The China-led bank won’t focus on “irrigation systems, arterial roads, rural roads,” Mr. Brodjonegoro said, citing knowledge of continuing negotiations on the new bank. “It’s good, because ADB and World Bank basically are covering more basic infrastructure,”
Brodjonegoro is misinformed. The ADB is not doing a good job of covering basic infrastructure. The Japan led bank is headquartered in Manilla. Despite the proximity of the ADB -established in 1966- Manila still suffers from some of the highest levels of poverty in Asia.
http://www.dailymail.co.uk/news/article-2339640/Manila-slums-Forced-live-makeshift-shanty-towns-built-disaster-zones-poor-families-Manila-left-Asias-fastest-growing-economy.html
http://en.wikipedia.org/wiki/Asian_Development_Bank
A New Generation of Changemakers are Being Ignored by Big Finance
Every day, crowdfunders log on to Kickstarter, Ketto, Pozible and StartSomeGood, and see 1-2 million dollars poured into projects that are drastically raising standards of living.
Every day, crowdfunders log on to Kickstarter, Ketto, Pozible and StartSomeGood, and see 1-2 million dollars poured into projects that are drastically raising standards of living.
A new wave of social entrepreneurs are operating on a shoestring, causing lasting change with budgets in the 10-100k range. Meanwhile, the old imperial banks massage billions into pointless showboat projects.
If Brodjonegoro's smooth talking indifference is genuinely symptomatic of deeper policy in the AIIB, we can expect to see the self certified great-and-good of Asia pour billions of capital into big ticket projects, while their countrymen scrap over crumbs from the table.
Thank you, Mr Brodonegoro, for focusing on seaports when your countrymen lack clean water, power plants when families use kerosene for electric light, on helipads so the elite can hover daintily over Jakarta's slums from a respectable altitude. Thank you for completely ignoring rural development, water sanitation, agriculture, healthcare, and anything that could genuinely solve Indonesia's poverty.
Thank you, Mr Brodonegoro, for focusing on seaports when your countrymen lack clean water, power plants when families use kerosene for electric light, on helipads so the elite can hover daintily over Jakarta's slums from a respectable altitude. Thank you for completely ignoring rural development, water sanitation, agriculture, healthcare, and anything that could genuinely solve Indonesia's poverty.
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Glimmer of Hope: Behind the Scenes War?
Persistent rumors from (hopefully) credible sources have suggested that there may be a sea change taking place in the banking world. Is there still time for a turnaround?
It's early days yet for the AIIB. What will happen over the next 6 months? If the current Joffery Baratheon course continues, the AIIB are likely to be an even bigger laughing stock than the current western banks. We can only hope that bankers such as Brodonegoro will gradually be edged out of their sinecures by quietly innovative consortiums bringing saner policies.
There's a fierce war going on in finance. Heated backroom negotiations may eventually give way to some surprising changes. The first AIIB interview is disappointing, to be sure, but there's still everything to play for as events unfold. Meanwhile, the blogsphere can only watch policy interviews closely, expose double-talk, and laugh as the banking old school cling by their manicured nails to their unmerited positions.
Ye shall know them by their fruits. Do men gather grapes of thorns, or figs of thistles? Matthew 7-16. Will the AIIB fund water filters, rural development and grassroots innovation, or will they pour public money -our money- into financial black holes and cushy jobs for the boys?
Until banking properly takes care of the i) micro-finance scene, ii) SMB owners, and iii) human basic needs, we can be sure the financial world is occupied by narcissistic, ineffective cartels.
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