AIIB may not close ASEAN infrastucture gap
Thursday, August 20, 2015
Subject
ASEAN core countries and the Asian Infrastructure Investment Bank.
Significance
The Asian Infrastructure Investment Bank (AIIB) plans to begin lending in early 2016. Three ASEAN countries -- Malaysia, Thailand and the Philippines -- have not signed the bank's articles of agreement, despite their infrastructure development needs. These needs will grow as ASEAN integrates, for instance via the ASEAN Economic Community (AEC) free trade area from end-2015.
Impacts
- Should Manila reject the AIIB, this will create an opening for further Japanese support of Philippines infrastructure.
- Early credibility among lenders could lead to the AIIB's rapid expansion in Asia.
- Until then, established development lenders will dominate -- the AIIB is untested.
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