From Nathan Sheets, US Treasury Under Secretary for International Affairs, in The Wall Street Journal, ” U.S. Looks to Work With China on Fund,” 3/23/15:
The U.S. would welcome new multilateral institutions that strengthen the international financial architecture. Co-financing projects with existing institutions like the World Bank or the Asian Development Bank will ensure that high-quality, time-tested standards are maintained.
This is nothing more than spin control. The US is now welcoming the Asian Infrastructure Investment Bank (AIIB), which it had told all its friends not to join. Now that almost all of them have joined, the US is trying to put the best face on the situation, while lobbying for some sort of tie-up between the AIIB and US-dominated infrastructure banks. The driving forces behind the AIIB, China and Russia, are unlikely to follow that path. Mentioning the “high-quality, time-tested standards” of existing institutions is risible, since development banks are infamous for politically motivated loans that mostly find their way into government and crony pockets and fund way-over-budget bridges, roads, and projects to nowhere. The best development engines have always been private foreign investment and capitalism, but that’s an argument for another day.
For more on the AIIB and the US’s changing relationship with its friends, see “The Party’s Over,” SLL, 3/23/15.
I always enjoy how government-backed institutions get to use my tax dollars to “cofinance” projects and then take all the credit. Of course, when the projects fail, more of my tax dollars are somehow required to bail the project out, pay off investors, or what all…Reminds me of how many ways I am/have been taxed to finance my social security.