The Role of AIIB in the ‘New Normal’ Era for Indonesia and ASEAN

Abstract

History shows that trade and industrialization were the keys to economic development in East Asia and Southeast Asia. But situations change. The current rise in economic nationalism leads one to ask: Can Southeast Asian nations, including Indonesia, still use the old recipe of open trade and industrialization? Does economic cooperation still have a place? Against the backdrop of a changing trade environment and creeping protectionism under the Donald Trump US administration and amid lackluster global growth, the question that we must ask is, what can Indonesia and other Southeast Asian nations do given these conditions? This essay will specifically examine how the Asian Infrastructure Investment Bank (AIIB) can play a role in this situation. This essay argues that to overcome the anti‐globalization sentiment, it is necessary to create regional cooperation success stories from policies that are politically feasible and economically sound. There are several candidates for such success stories, including using the ASEAN Infrastructure Fund to develop ASEAN connectivity. The AIIB together with the ADB can play an important role here.

Implementation of the power generation program by the Asian Infrastructure Investment Bank (AIIB) to improve the economy in Bangladesh

“…Literature about the AIIB has been widely cited in previous articles starting from the existence of the AIIB as a form of China's rise in global economic governance (Kai & Huiyun, 2018), until the progress of the AIIB formed global economic polarization between Western neoliberalization and the Chinese economy (Kim & Sanghoon, 2023). In accordance with the aim of establishing the AIIB, in dealing with imbalances in developing countries through infrastructure funding, the AIIB has an important role in infrastructure progress in ASEAN countries, especially Indonesia amidst increasing US economic nationalism (Basri, 2019). Apart from that, the implementation of the AIIB project is also considered positive in a number of African countries, this is because AIIB can be the key to the problem of gaps in infrastructure development financing (Fatile et al, 2016).…”