The genesis of this book lies in the authors’ interest in the political economy of new development aid in the global South, and in particular the role of China both in making room for the agency of global South countries and in emphasizing the construction of physical infrastructure. The region of Latin America and the Caribbean (LAC) is one of the world’s poorest and most backward precisely in physical infrastructure. This one of the authors witnessed first-hand when he made a perilous journey to Colombia’s Pacific coast and saw for himself the enormous gap between the claims of the Colombian state and the reality of the Province of Buenaventura. Despite the new port facilities, the road infrastructure just outside the city of Buenaventura is so poor as to render the brand-new port useless as a way of distributing goods by sea to Colombian consumers.
The authors noted the striking fact that the “Asian” Infrastructure Investment Bank was branching out into the LAC region, about as far away from its own region as one can get. The advent of the AIIB to LAC was therefore very exciting, as the AIIB seemed to promise finances for the very expensive infrastructure that LAC needs so badly, but except for extractive infrastructure has been unable to build for itself under the terms of trade of the present global political economy. The AIIB was “the new kid in town” and seemed to promise a new order. It also raised “philosophical” questions like: Why is it so hard to get physical infrastructure financed? Are China’s policy banks actually going to foot the bill for all the “connectivity” projects (i.e., over and above the extractive ones) which LAC has lacked for so long?
What is China’s self-interest in LAC? Why did AIIB come to so remote a region in the first place? It is hard to keep up with institutions connected to China, because they are constantly evolving and changing. Chinese economic statecraft has utilized the AIIB and the Belt and Road Initiative (BRI) to engage with “America’s backyard”. China had been flogging the BRI very hard in order to gin up enough membership to mount a respectable display at the April 2019 Second Summit of the BRI. China so far has only needed “names” (but lots of them) to validate its scheme, not only for international but also domestic consumption: – “China is changing global governance and policy”. The first LAC “buyer” of the BRI was Panama in 2017; since then, it has rapidly spread through the region. Nineteen countries have agreed in one form or another to connect up with it (Mendez and Alden 2019). Yet the Initiative itself remains fantasy agency, mostly; certainly in LAC, where Beijing still has not figured out how best to operationalize it. One is astonished to hear both sides keep touting it with no infrastructure to show for the heroic rhetoric. One bright spot is Ecuador, which did become a full member of the AIIB just recently, on 1 November 2019 (MIREMH 2019).
What is the point, then, of bringing the AIIB to LAC in particular? In the beginning, the Chinese were touting their policy of non-conditional aid and loans. China does have the power to finance the building of infrastructure through its policy banks, such as the China Development Bank (CDB) or the China Eximbank. But these lack oversight and accountability, and their focus is on extraction of natural resources from the global South, not “connectivity” – the promise China has used to “sell” specifically the BRI to a South that had been growing sceptical of Chinese commercial goals in their own countries.
In interviews and conversations with Latin American and other diplomats, everyone says China is very proud of the AIIB as well as the BRI. But the AIIB’s Bretton Woods governance template has meant the Bank has slipped Beijing’s grasp in many important matters. That is perhaps why LAC were drawn preferentially to the BRI, which is still under Chinese control. Endorsement of AIIB only foreran endorsement of BRI because Beijing did not at first know how to win endorsement of BRI in LAC; their attempt to “mass-market” it through the medium of the China-CELAC Forum in January 2018 having been a notable failure (Itamaraty 2018; see also: Zhang 2018).
Equally important and intriguing was the motive implicated by the new development model, namely the agency of LAC. The global South is important, and its agency matters. Becoming prospective members of the AIIB would give back agency to LAC countries, who are so inured to dancing to the tune of the great powers of the North. Brazil’s leadership as a Founding Member was intriguing in the beginning, seeming to have caused a cascade of accessions from LAC to what was billed as the “Chinese World Bank”. All the more intriguing was Washington’s campaign to prevent it, and how spectacularly it failed. But how (if at all) is LAC taking the lead in advancing the AIIB today?
Ever since the first flush of Brazil’s founding membership, the AIIB has been knocking on LAC’s door. But is anyone home? The hosts appear to have opened the door to the AIIB, but kept it in the parlour waiting, while the hosts cater for other suitors. There is a photograph of AIIB President Jin & Vice-President Alexander meeting in Chile with Chilean President Piñera, on their way to the Inter-American Development Bank’s annual meeting in Argentina in March 2018. They are in the parlour of the Presidential palace, speaking earnestly (MEFT – Chile 2018). Why has there been no follow-up, even by Chile, in more than a year? In fairness to Chile there has been some follow-up by some very competent career bureaucrats, but Congress showed essentially no interest until recently when the legislative process finally began on 7 May 2019 (Cámara de Diputados – Chile 2019).
In the event, the Latin Americans showed they had no stamina. They had only had to write a few letters to become “prospective” AIIB members; likewise, endorsing or “committing” to the BRI, which Beijing had been touting throughout LAC (as in the rest of the global South), required only promises, not the sacrifice of real action. The BRI has proved more popular than the AIIB all over Latin America and the Caribbean – it draws more publicity for one thing, which politicians love. And Memoranda of Understanding on the BRI, like AIIB prospective memberships, cost next to nothing, are interpretively open-ended and at least seem non-committal. Full AIIB membership is rigorous, a serious commitment to a bona fide international organization, no longer merely an endorsement of Beijing. The classical Bretton Woods-style governance of the AIIB means that non-state actors, for example, have more scope to hold the AIIB and its members to account.
The authors discovered that the LAC region is the only one in the global South which only has a single full member of the AIIB (Ecuador); seven other countries are still only prospective members at the time of writing, even though in nearly all cases the fiscal burden is very slight. This unusual pattern implicates the theory of Constructivism as an explanation: the Latin Americans have “socially constructed” amongst themselves an Institution of Mañana which pervades both business and politics, at both domestic and inte...
