New Zealand: Asian Infrastructure bank: Leaving the Empire
This week New Zealand, home of the Kiwi and having more sheep than humans, becomes the 24th founding member of the Asia Infrastructure Bank (AIIB).
The first “developed country” to join the institution – although we’d not call New Zealand ‘Developed,” but would agree it has Western Values. Superior values because it plays Rugby, 45 minutes each half without stopping every 30 seconds, does not allow forward passing, and it is a foul to interfere with any player not holding the ball, and New Zealand plays Rugby with considerable skill! I’d like to see a 300 lb America Football player run continuously for 45 minutes.
For those of you who don’t follow Imperial minutiae, the US has control of the dollar through the IMF and World Bank, where it stacked the boards of both institutions so that the US always has a majority of the votes (based on one million dollars one vote, more or less). And you believed the Republicans recently invented dollar based voting – nope, the Supremes are just adhering to the precedent, based on old American Imperial Values.
Because the US controls the US dollar, any country with a trade deficit, and who “borrows” in dollar-linked bonds, is a US vassal (or colony), with only the appearance of being a democracy. Recall the proverbial Mercantile Golden Rule: He who has the gold, makes the rules. Anyone making international transactions in dollar-denominated amounts is forced to follow US rules. As Europe has discovered, this requirement makes borrowing money in US dollars a dangerous practice. Look at Greece, Portugal, Spain, Ireland, and Italy. Countries who borrow or trade in US dollars have to play by US rules, and to that extent, they surrender some of their sovereignty, becoming in some cases, US vassal states. China has decided to fix this problem. They established the Asian Infrastructure Investment Bank (AIIB). ,
China wisely decided not to play the dollar game, and announced that the AIIB would provide infrastructure funding. Wikipedia says:
The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia Pacific region. AIIB is regarded by some as a rival for the IMF, the World Bank and the Asian Development Bank (ADB), which the AIIB says are dominated by developed countries like the United States and Japan.
Which brings us back to Asia. We all know China and Russia live on the same land mass, and are forming a pan-Asian trading bloc. Russian minerals and Chinese industry are a good fit for the region, and are safe by virtue of geography, from the US’ 600-ship Navy. Moreover, the infrastructure in Asia is well protected from Climate Change Sea Level rise, whereas the US’ infrastructure, 90% of which is coastal, is very vulnerable to rising sea level disruption and destruction. Think of the power stations, sewage treatment plants, and water distribution facilities that are located on the coast, or near a river.
Due to the bipartite bickering fostered by the Republican and Democratic parties (both of which are badly misnamed – neither party is what its name claims), the US defense against rising sea levels is a line of Republicans holding hands around the US’ coast, forcing back the rising waters by force of Will (Koch if you must). The last time this was tried, by Canute, as a demonstration of his fallibility to his court, the result was a resounding success. We expect the Republicans to meet with the same success, and demand a federal bailout, similar to the gamin of the federal flood insurance scheme to favor those of the poor who own 10,000 square-foot hovels situated next to pristine beaches.
The new pan-Asian alliance now has the financial institution to finance its growth, independent of the US. Think about that, for just a moment. Now there’s some actual competition for the IMF and the World Bank! We can’t predict how that will turn out, but the two aforementioned organizations seem to have developed bad reputations worldwide, so maybe the AIIB will be an improvement. Time will tell. At any rate, countries that join the AIIB may be able to borrow with less stress on their sovereignty. However, we imagine that the first to join will get the best deal, so Hurry! Hurry! Hurry!
For all the smaller countries out there we’d recommend joining as quickly as possible, just because if you want a good deal, get two quotes, one from the IMF and World Bank and one from the AIIB. Competition keeps the parties more honest, a lot less arrogant, and to buy most stuff one does not need dollars to buy from China, because the US has little to sell.
The US, with its monopoly on world financial institutions now threatened, and an attitude bolstered with 60 years or so of unfettered hegemonic behavior (thinly disguised as “help”), now faces competition. As the US insists, competition is good for the customer.
For the US, it has to accept the 21st century will be a multi-polar world, and the US has succeeded in its goal of losing the gravitas associated with being the largest economy in the world. We’d suggest a dash of humility, and losing the arrogance which come with “American Exceptionalism,” as this Exceptionalism looks a lot like bullying, coupled with grinding down citizens of the world along with its own citizens, to help them become mired in poverty.
In closing, it’s interesting to note that America has talked a good game over the last century or so. In contrast, China has actually succeeded in lifting many of its citizens out of poverty, as the US grinds its citizens into poverty. That’s the difference between talk and action. America has ruined its reputation, and its economy, while impoverishing their middle class. Unfortunately, their middle class was the key to their success. China understands that, and is building up its society. It would be better for America, if the US started to follow China’s economic example. China has its faults, to be sure. Pick out the good points, and follow the example. When someone has a good idea, imitate it. The rest of the world did that with regard to America. Now it’s America’s turn to imitate others, because the US has lost its way.
Except there is an Except in Exceptionalism, and an NIH in the US.