The AIIB and shifting economic dynamics in Southeast Asia

The China-led Asian Infrastructure Investment Bank, which seeks to help plug Asia’s infrastructure-funding gap, has begun shifting the economic balance of power and influence in Southeast Asia, a region in which Japan and the United States have traditionally been the key external economic players. While the AIIB has a capital base of $100 billion currently, the Asian Development Bank and the World Bank have a capital base of $160 billion and $223 billion, respectively.  In 2015, the World Bank and ADB combined gave out loans worth $55 billion, a far cry from the $8 trillion the ADB forecast would be needed between 2010 and 2020 to meet Asia’s infrastructure development requirements. Secondly, the World Bank and the ADB usually take two to three years to assess a single project, which is too slow to accommodate fast-growing needs in emerging markets.

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