Focus misplaced in Taiwan’s AIIB membership bid
Taiwan earlier this week sent in an almost literally last-minute application to join the Chinaled Asian Infrastructure Investment Bank (AIIB) initiative as a founding member.
The rush to beat the deadline just minutes before the application closed on midnight March 31 was rather embarrassing, showing how ill-prepared Taiwan was for such an ambitious initiative.
Since then, little discussion has been heard concerning the benefits and necessity of joining the AIIB, taking for granted that it must be good.
Even Finance Minister Chang Sheng-ford suggested that it would not hurt much losing the minimum NT$2.2 billion Taiwan would have to put into the AIIB even if the bank failed.
Instead, much of the attention has been directed toward a political issue rather unique to Taiwan because of its diplomatic isolation: What name would Taiwan accept for its AIIB membership?
High-level government officials have vowed that it would be unacceptable if Taiwan had to join the bank as “Taiwan, China,” or ‘Taipei, China” — names underscoring Beijing’s sovereignty claims to the island.
Our nation has hardly ever been allowed to use its official title “Republic of China,” or the now commonly used name “Taiwan.” In international organizations where it is allowed to play a part — such as the International Olympic Committee — it is referred to as “Chinese Taipei,” which seems to be the one preferred by the government for its membership in the AIIB.
The name issue may not be totally irrelevant, but there is another kind of political game brewing in this AIIB initiative that Taiwan must be more wary of.
The establishment of the AIIB is as much a political game as an economic one, pitching China against the United States.
The economic prospects for the AIIB look promising. There is US$8 trillion in demand for funding for infrastructure development around the world up until 2020, according to a study conducted in 2010 by the Asian Development Bank (ADB), of which Taiwan is a member represented as “Taipei, China.” (Yes, Taipei, China — one of the names that the government says it won’t accept for its AIIB membership.)
It remains to be known how Taiwan can leverage the AIIB platform to have a share of these huge investment opportunities, as many aspects of the China-led initiative have yet to be determined.
Certain proposals have been made for the AIIB: China promises that it will not have veto power, the kind that the United States has in the International Monetary Fund (IMF); and the registered capital will be US$100 billion.
Only the founding members — those who applied for membership by March 31 — will be able to influence and set the rules of the game within the AIIB.
This is the reason why Taiwan is so eager to become a founding member. But would it be really able to exert its influence?
We can already foresee some form of arm-wrestling among the founding members in shaping the operations of the AIIB. But how would Taiwan play along in this game?
Taiwan waited so long before submitting its application for AIIB membership because it would not dare to make a move without some form of understanding from the U.S.
If it is accepted into the AIIB as a founding member, will Taiwan be able to make a major move without the understanding of the big boss in the bank, namely China, which has to be blamed for Taiwan’s predicament?
China says it is not seeking veto power in the AIIB, but that does not mean that it is not seeking dominance.
If Taiwan had to take sides in arguments between China and other AIIB members, which side would it take?