On the surface, the Asian Infrastructure Investment Bank (AIIB) makes sense ("What AIIB means for Asean connectivity"; last Thursday).
After all, how is Asean going to fund US$8 trillion (S$11 trillion) in national infrastructure?
However, I am wary that China is the major contributor to funding the AIIB - putting in close to US$30 billion of the AIIB's capital stake of US$100 billion.
I would be very interested to know which projects get funded and which will not, and who decides.
After all, if I contributed $30 to a pot of $100, I would want a bigger say in how my money is going to be spent.
Will there be strings attached to the funding? For example, will the main contractors of the projects need to be China-owned companies?
Money will not be given away freely without the expectation of a return on investment (ROI).
So what happens when the ROI targets are not met? Will the project be canned and affected countries expected to repay the funds? What happens when these countries are unable to do so?
Will national interests be subordinated to the AIIB? Will we have another Greek tragedy in the making?
Ms Sanchita Basu Das talks about the importance for Asean to maintain China's interest in the region.
I am pretty sure China is very interested in this region, and that interest has nothing to do with the economic well-being of Asean or its Asian neighbours, but rather with paranoia.
That said, I concur with Ms Sanchita on four points.
- Such a financial institution is needed to fund Asia's growing infrastructure needs.
- Projects need to be at a level that benefits several countries and not just one country, unless it can be demonstrated that doing so benefits others as well.
- The AIIB will be an extension of China's soft power, like when it helped build railways, ports and so on in Africa.
- Only time will tell where AIIB will take us - to seventh heaven or hell on earth.
Maybe I am being over-cautious. But where national interests are concerned, throwing caution to the wind is not only foolhardy but also irresponsible.
Matthew Ong Koon Lock
