US stance against Chinaled bank ‘embarrassing’, says Ex-Goldmans exec

BEIJING: Washington’s opposition to a new China-led development bank is ‘embarrassing’ and ‘idiotic’, a former top Goldman Sachs executive said yesterday, as an increasing number of US allies embrace the institution.

Jim O’Neill, former chief economist at the US investment bank and chairman of Goldman Sachs Asset Management, made the comments about the Asian Infrastructure Investment Bank (AIIB) during a visit to Beijing.

The US has lobbied hard against the US$ 50 billion project, but its efforts have not stopped powerful allies including Britain, Germany, France and Italy signing up, with Australia and South Korea considering joining.

“I certainly applaud the UK authorities for the decision they’ve made. I’d call it ‘ enlightened self-interest’,” said O’Neill, who is known for having coined the BRIC acronym to refer to emerging powers Brazil, Russia, India and China.

“If you are a small, open economy, and you want to do things that are right for you, why would you not do that?” he added.

“I think it’s rather embarrassing for the US that they – for some idiotic reason – started to complain about this.” The Obama administration has been waging an intense but low-profile lobbying campaign against the new bank, unveiled in October.

Officials have insinuated that the AIIB would lower international development standards but Washington apparently underestimated China’s appeal.

Several observers have cast blame for the debacle on US lawmakers.

The United States is blocking reforms of the International Monetary Fund (IMF) that would raise the voting rights of emerging powers, and sometimes is accused of neglecting the World Bank.

Washington is the major stakeholder in both institutions.

“I wouldn’t be surprised that if the US Treasury thought they could get it through Congress, they probably would have agreed themselves,” said O’Neill, who was in Beijing to promote a British government-commissioned review on global antibiotics resistance.

“Of course, what the whole episode highlights – in such a simplistic and clear way -- is how intransigent the US Congress is,” he added.

OECD Secretary- General Angel Gurria, speaking to reporters in Beijing last week, blamed congressional ‘paralysis’ for blocking the IMF changes. — AFP