Which bank? US dictates to Australia not to join the AIIB

by Max O

The Abbott Coalition government's decision not to join the Chinese initiated Asian Infrastructure Investment Bank (AIIB), launched in late October, demonstrates once again the United States’ dominance over Australia. It took just a call and nod from US Secretary of State, John Kerry and President Barack Obama to stop Australia from participating in China’s new regional infrastructure investment bank.

No doubt the AIIB presents a considerable challenge to US global financial supremacy. This dominance is maintained through institutions such as the International Monetary Fund (IMF), World Bank (WB) and the Asian Development Bank (ADB).

The IMF, WB and ADB serve the wishes of the US, European and Japanese multinationals and consequently must stymie potential financial rivals. These banks enforce structural adjustment policies on countries who receive their loans, which in effect are economic and political conditions that lead to impoverishment of the general population and economic collapse. This then leads into the vicious cycle of more loans and indebtedness for the recipient country.

Compradors obey orders from the US

Initially treasurer Hockey and trade minister Robb approved of joining up to the AIIB and apparently it had cabinet approval. This represented the desire of local sources of finance capital to participate in and profit from infrastructure development within the region. However Foreign Minister (or Minister for the United States in Australia) Julie Bishop put paid to this and used the cabinet's national security committee to reverse the decision on joining this new bank.

A number of reasons were put forward as arguments against the AIIB: Its code of practice and transparency aren't up to international standards; infrastructure projects financed, such as ports in the Asian Pacific region, would augment Chinese military capabilities.

None of these came close to the truth.  Despite all the professions of support for level playing fields, market mechanisms and the free flow of capital, the neo-liberal ideologues of US imperialism want strict controls on who, where and by whom capital is to be invested.  This is the financial equivalent of the old military and political concept of “spheres of influence”, the struggle over the division of which has always been a feature of imperialism.

21 Asian countries, including ASEAN nations, are the founding members of the US$100 billion AIIB. Most of the start-up capitalisation of US$50 billion will come from China. This will make the AIIB about two thirds the size of the US$175 billion Asian Development Bank, a Japanese-US predator financial institution.

The blocking move by the US against China's new financial initiative has scored some success with Japan, South Korea, Indonesia and now Australia not joining. However it can't stop the inexorable tide that is building up for financial freedom from the clutches of the Eagle Empire.

Alternatives spring up to oppose the US

The BRICS nations (Brazil, Russia, India, China and South Africa) as recently as July this year founded two new banks with a combined initial capital of US$150 billion; the New Development Bank whose task will be to finance infrastructure and sustainable economic developments and the Contingent Reserve Bank who will offer support to those members in financial difficulties.

The manoeuvrings of US imperialism against the AIIB must be seen in the light of America's overall strategy of global domination. It uses the 'Asia Pivot' military strategy and the Trans Pacific Partnership (TPP) trading pact to undermine and eventually control China and so maintain its hegemony in the Asia Pacific region.

Likewise it uses the IMF and the WB to influence investment and economic policies of weak nations which amounts to US and European corporations financially looting these countries. In addition the US has no hesitation in wielding its military might to secure economic and strategic resources whether it be in the Middle East (Iraq, Afghanistan, Libya and Syria) or Europe (Georgia, Ukraine and other former Soviet bloc nations).

The ruling class in Australia is firmly bolted onto the fortunes of US imperialism. The AIIB being declared out of bounds for Australia, our involvement in the US military 'Asia Pivot' and the TPP are for USA's strategic benefit not ours.

Australian economic centres of activity, whether they be banking, finance, mining, service industry and what's left of manufacturing etc are directed and overseen by predominately US capital. The political, economic, cultural and military domination of Australia by the US, places the nation in the ranks of client states that America manipulates around the global to maintain its supremacy.

Nevertheless imperial empires do not last forever and China's advance into what was once US imperialism's stamping ground indicates America’s inevitable decline. Of greater importance though in defeating US domination is the mobilisation of the world's peoples in liberating their countries and forging ahead with the task of building socialism.