A Tale of Ending Poverty: The New Financial Institutions and China’s Global Strategy

Abstract

The term “end-poverty” is adopted by the World Bank (WB) in working with the Asian Infrastructure Investment Bank (AIIB) and countries within the sphere of influence of the Belt and Road Initiative (BRI). This chapter contextualizes the BRI in a world of struggle, one in which actors, including sovereign nations as well as new and traditional financial institutions involved in the BRI, take actions, based on their own field of expertise and knowledge. “End poverty” is the common-ground between these various actors. The moral endowment and indeterminacy of the term “end-poverty” enable WB and the new financial institutions like AIIB and the New Development Bank (NDB), to engage with the BRI. These actors engage with the BRI primarily for their own interests. The new financial institutions engage with BRI out of their member countries’ interest in the BRI projects, instead of filling in the infrastructure investment gap in the targeted regions and ending poverty. The founding members of the new financial institutions aim to challenge the existing world order in multilateral lending and development financing rather than to “end poverty”. Likewise, China deploys its global strategy and furthers its interest through the BRI. The financing mechanism of the BRI exemplifies a combined contract-based infrastructure financing and political-objective defined development financing. While the term “end poverty” enables the actors’ struggle for interests, these struggles contradict with the term “end poverty”. Lack of analytical rigor on the term “end poverty” risks, with the BRI projects, strengthening the elites and their power in the recipient countries over their populations.