Asian Infrastructure Investment Bank

Nic Crowther
Wed 29 Oct

Canberra consultants celebrate! There’s a new development bank in town, the Asian Infrastructure Investment Bank (AIIB), and the financers have a very large war chest. While the Australian Government has passed on an opportunity to be one of the 20 initial partner countries for this new entity, the trickle down effect across the region might mean locals are well placed to supply services and expertise to the field.

Following the renewed focus by the Australian Government on development in the Asia-Pacific region, the unveiling of the AIIB by the Chinese Government, funded to the tune of around US$50 billion at launch, was an interesting move. Now, that’s a substantial amount, but interestingly, only a third of what the existing Asian Development Bank (ADB) has at its disposal.

Observers consider this a strategic move by China to free itself of the restraints of the ADB and directly target projects that will ensure recognition of their investment in the years to come. Given China’s increasing sway across Africa, Southern Asia and Asia Pacific, this newfound ability to move quickly and directly with recipient countries sets a whole new paradigm for Chinese influence across the globe. It’s important to remember that despite the general goodwill of participants, foreign aid is essentially a way for countries to buy influence across the globe and attract key votes at international forums.

Still, the experienced personal required to roll out the programs have to come from somewhere, and there will be plenty of opportunities for those in Canberra who might have found themselves out of a job in the last 12 months. Given Australia has recently consolidated its aid program, with significant impact on the 2,000 staff based at AusAID’s Canberra offices and at post in more than 30 countries, there will be more than a couple of eyebrows raised at the RG Casey building in Barton.

So too, the new bank might have an indirect benefit for the local Canberra consultancy market, which has seen further cooling since the absorption of AusAID into DFAT. The arrival of another huge fund to promote the economic status of countries in what has traditionally been Australia’s patch signal interesting times ahead for large firms and the Department of Foreign Affairs alike.

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