27
Oct
India, along with 20 other countries on Friday, signed an agreement to become founding members of the China-backed Asian Infrastructure Investment Bank (AIIB) to aid the infrastructure development in the Asian region and reduce the dependence on Western-dominated World Bank and IMF. But where dependence in the region will decrease on the west, it will increase in India and China, and it’s the same deal for countries like ours. We get to choose who we want to be indebted to. The plan is that the bank will play a “complementary role” to aid the good work of the IMF and ADB. But, the motives of India and China are transparent. The IMF as been a huge boon to states that have invested in it, bringing in consistent dividends, as well as control over economic policy across the globe. Rather than competing for a piece of the pie, China and India have decided to bake their own.
The bank will be functional next year and voting power will be decided over GDP and Purchasing Power Parity figures. This puts India in the second spot with most voting rights after China. This is part of China’s big play for more international financial control. Not only will the AIIB be headquartered in Beijing, but the BRICS (Brazil, Russia, India, China and South Africa) Development Bank (BDB) formed this year is also based in Shanghai. The BDB is set to commence its operations with an Indian as its President.
Pakistan is also set to be member of the AIIB with Ishaq Dar signing the MoU. If you cant beat them, join them, goes the saying. And we can’t really beat our dependency on institutions like the IMF. One hope to break the power hold of the likes of IMF, WB and WTO was the rise of the BRICS states. However, until countries like Pakistan can develop economically enough to become part of something like the BRICS, we are left to sign MoUs, increase taxes and hope the IMF, or some other bank, can give us a loan to keep us afloat.
Source: http://nation.com.pk/editorials/25-Oct-2014/the-new-imfs