Legacy must be on Obama’s mind these days as his two-term presidency nears an end. It might seem early, but the approaching 2016 election cycle starts in earnest as soon as Hilary Clinton announces her candidacy. That could be only months away. Then the media cycle fills with coverage of every presidential hopeful’s latest utterance and Congressional paralysis settles in.
Little can be done in twenty months that hasn’t been accomplished in six years save for some much needed focus on longer-term policy. This positioning was supposed to include an “Asia Pivot”, loosely defined and broadly conceived. So far it has lived up to its conception.
Enter news of a China-led Asian Infrastructure Investment Bank (AIIB) featuring participation of major allies the UK, France, Germany, Australia, South Korea and now Japan*. Glaringly absent, the U.S.
What’s stopping U.S. involvement? Partly an inherited pride from post-World War II institution-building that created the IMF and World Bank. Opponents highlight the risk of the bank becoming a potential instrument of Chinese regional soft power, a potential lack of transparency and less stringent lending standards that may erode development criteria created over the past several decades. These include social imperatives, environmental standards and labor protections.
While these remain reasonable concerns, China already lends heavily throughout the region. No amount of outside pressure has influenced how this aid has been disbursed or under what terms.
Only involvement with this new multilateral institution opens the door to engagement with China and the region on development issues. With little cost, potentially none at first except for some diplomatic formalities, the U.S. could play an influential role in the first round of serious regional economic institution building since the 1966 formation of the Asian Development Bank (ADB).
Foregoing a role, even a limited one, pivots the U.S. further away from Asia signaling that the U.S., while espousing support for regional integration, does little to back-up those ideals.
As regional trading patterns increasingly revolve around China’s economy a new constellation of partners will define the regional development agenda, with or without U.S. involvement. Avoiding the AIIB risks forfeiting hard won gains. Asia will then see the U.S. primarily through a narrow security lens.
Refusing to work with China and the rest of Asia, even when the terms are not ideal, is not a legacy worth leaving.
* Note: After publication Japan changed course and announced it would not be joining the bank at this time.
For more on the issue see:
- In the join camp: The AIIB Debacle: What Washington Should Do Now, CFR Blog, 3/16/15
- Opposition to joining: The AIIB Is a Threat to Global Economic Governance, FP, 3/31/15
- Broader context: How a Chinese infrastructure bank turned into a diplomatic fiasco for America, Vox, 1/1/15
- Recent changes: Japan says not bound by deadline to join AIIB, and not yet decided, Reuters, 3/31/15
Image: Xinhua/Li Xin