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Citizens Electoral Council of Australia

Media Release Tuesday, 13 December 2016

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Fight attempts to white-ant AIIB

The Asian Infrastructure Investment Bank’s proposal to fund only “environmentally and socially acceptable forms of energy” has set alarm bells ringing in Canberra. Treasurer Scott Morrison announced last Wednesday that he would fly to Beijing and personally intervene in the negotiations to ensure the bank is able to invest in coal, gas and nuclear power projects, rather than only “renewables”.

In an October 2016 discussion paper titled “AIIB Energy Strategy: Sustainable Energy for Asia”, AIIB Vice President for Policy and Strategy Dr Joachim von Amsberg, a former Vice President of the World Bank, proposed to limit funding to renewable energy infrastructure projects that support the “global transition towards an efficient and less intensive energy mix.”

(For a practical example of what von Amsberg is proposing, click here to read about Greenpeace’s solar power project in an Indian village that saw the locals turn against what they called “fake” solar power and demand “real” coal power instead.)

When then-Treasurer Joe Hockey announced in April 2015 that Australia would join the AIIB, he told Parliament that “Australian firms will benefit from improved infrastructure throughout the region, which will also help our commodity exporters. The bank will help build new and improved infrastructure, which in turn will drive increased demand for our commodities and for Australian services.” Our main commodities exports, of course, are energy (fossil fuels, natural gas and uranium) and construction raw materials (iron and coking coal for steel-making). With prices for these commodities struggling to rise from record lows, a 0.5 per cent contraction in GDP just announced for the September quarter, and budget deficit forecasts as far as the models can project, talk of a “less intensive energy mix” is another setback for Australia’s exporters.

Self-inflicted

The AIIB’s insistence on renewables is out of step with its intention to finance effective infrastructure, and with the energy policy of its main backer, China, which is heavily investing in new coal-fired and nuclear power stations. There is in fact evidence of an international attempt to white-ant the AIIB, which has produced this renewables policy and in which, ironically given it has backfired on Australian producers, the Australian government is complicit.

The Australian Treasury noted in its 2015-16 performance report that ever since Australia decided to join the bank, Treasury actively negotiated to ensure the AIIB would have “standards comparable to those of other Multilateral Development Banks (MDBs)”—that is, the Washington, DC-based World Bank; and the Asian Development Bank (ADB), headquartered in Japan but also de facto run from Washington.

The World Bank and its sister institution the International Monetary Fund (IMF) were created at the 1944 Bretton Woods Conference, to fund both post-war reconstruction and the economic development of the so-called “Third World”. Instead they have served the predatory, City of London- and Wall Street-dominated Anglo-American foreign policy establishment by issuing loans at usurious rates of interest and on terms—the IMF’s infamous “conditionality”—that force the privatisation of state-owned enterprises and resources, rip away industrial protections in the name of the free market, and cripple development on environmentalist grounds. The countries that signed up to the AIIB and are aligned with the London-Wall Street system, including Britain and France, were also insistent on it conforming to World Bank “standards”. As a consequence, the author of the renewables policy, von Amsberg, was parachuted into the AIIB vice-presidency from the equivalent office at the World Bank.

Von Amsberg is a career technocrat who joined the World Bank in 1993 and made his name working on “environmental programs and policy studies” for Argentina, Chile and Paraguay in 1994-97, and later as “sector economist working on policy studies and projects in environmental management, rural and urban development” in Brazil. More recently he led the development of the World Bank’s “Programs-for-Results Financing” instrument, or PforR, launched in 2011, which gives the World Bank (and its controllers in London and on Wall Street) pervasive low-key influence over target countries’ domestic policies. His proposal to limit the AIIB’s funding of energy projects to ineffective and inefficient renewables is similarly motivated.

Public credit for real infrastructure

In 2015 the Citizens Electoral Council petitioned Parliament “to commit Australia both to full participation in the AIIB, and to full support for the BRICS [Brazil, Russia, India, China, South Africa]-initiated process of creating a new financial architecture for the world as the basis of a just economic order.” Instead, the Abbott/Turnbull government committed to reining in the AIIB in a bid to preserve the Western powers’ financial dominance over developing nations. They, and Australia’s exporters, are now reaping what they sowed.

It would be a crying shame if the AIIB were strangled in its cradle by green tape; hopefully China, India and others won’t let that happen, but Australia should also do all it can to stop it. The government’s motivation should not, however, be to ensure the continued profits of the looting, tax-dodging multinational cartel that controls Australia’s mineral and energy wealth (and donates piles of cash to both major political parties). It is hypocritical to champion abroad the kind of projects neither the Liberal/National Coalition nor its alter ego the Labor Party will lift a finger to promote at home. The Coalition’s rhetoric to the contrary notwithstanding, they are just as committed as the ALP to the domestic “carbon emissions reduction” and “renewable energy” policies that are already causing blackouts in South Australia; will soon cause chronic power shortages on the East Coast, beginning with the closure of Victoria’s mammoth Hazelwood brown-coal plant early next year; and will completely destroy the economy in the long run. Meanwhile, nuclear power remains illegal in Australia, and is dismissed as “uneconomical” by blinkered economic-rationalist policy gurus.

Here’s what Australia must do:

  • fight the attempts to white-ant the AIIB;
  • apply the excellent principle of a development bank domestically, by establishing a national bank, like the original Commonwealth Bank, to issue long-term, low-interest credit for development, and collaborate with international institutions like the AIIB on cooperative development projects;
  • develop our own coal, gas and nuclear resources in Australia, for energy, for production of steel and other commodities indispensable to an advanced industrial economy, and for a nuclear power grid that supplies both abundant, cheap and reliable baseload electricity and process heat for industrial purposes;
  • and nationalise our country’s vast resource wealth so that it can be developed for the Common Good, not the obscene profits of a very few.

Click here for a free copy of the CEC pamphlet, The World Land-Bridge: Peace on Earth, Good Will towards All Men, on the potential for cooperative economic development projects such as China’s One Belt, One Road, which the AIIB was established to finance.

Click here to join the CEC as a member.

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