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The Future of the Asian Infrastructure Investment Bank: Concerns for Transparency and Governance

Ito, Takatoshi

China has proposed the Asian Infrastructure Investment Bank (AIIB), initiating a key turning point in the international finance system. Unfortunately, its design at present is quite problematic, for several reasons: it limits participation by Western countries, effectively locking in China as the undisputed leader; the lack of a Board of Directors in residence; the potential for a conflict of interest if the AIIB will fund projects within China; the potential of China to use AIIB for political purposes; the relationship the AIIB will have with already-existing international financial institutions; and the potential for a weakening of “best practices” in order to compete against the other international finance institutions. For these reasons, it was the right decision for Japan not to join as a charter member in order to negotiate the MOU; nevertheless, Japan should maintain the option of joining the AIIB in order to have leverage over the architecture of the AIIB.

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More Information

Publisher
Center on Japanese Economy and Business, Columbia University
Series
Center on Japanese Economy and Business Occasional Papers, 72
Academic Units
Center on Japanese Economy and Business

Notes

The original article written in Japanese was published in Nihon Keizai Shinbun, column of Keizai Kyoshitsu, on April 30, 2015.

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