By Clifford Hwang

The reception to the proposal for the Asian Infrastructure Investment Bank (AIIB) has been highly divergent.  The United States and Japan are currently “non-committal” in regards to membership. Europe was wary at first; Germany will be one of the AIIB’s largest shareholders. China viewed it as a “diplomatic triumph.” Ultimately, the AIIB’s success will determine how it should have been viewed.

Chinese President Xi Jinping first proposed the launch of a China-led investment in 2013, and after two years of development, the AIIB is now expected to launch at the end of the year. The AIIB, in addition to institutions like the World Bank and the Asian Development Bank, is expected to provide funding for various infrastructure projects in Asia with its capital of $100 billion. With the growing need of infrastructure investment coupled with previous inadequate funding levels, the AIIB is expected to partially fill the investment gap in Asia, which is estimated to be around $800 billion a year. 

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November 11, 2015

By Joe Vladeck

Greeks protest austerity cuts by Piazza del Popolo | Flickr

Nations have been defaulting on debt for about as long as nations have been borrowing money. The Greeks went first. In the 4th century B.C., three quarters of Greek city-states defaulted on loans issued by a temple on the island of Delos.

Today, Greece is still struggling. Although it is not the most recent nation to default on its sovereign debt (that dubious honor belongs to Cyprus), Greece's on-going sovereign debt travails nearly led to the collapse of the Euro in 2012 and continue to fester. Granted, the question of whether Greece actually "defaulted" in December 2012 involves complicated semantics, but Greece's track record of debt repayment record is spotty. According to two renown economists, "Greece has been in a state of default about 50% of the time" since the country's independence in the 1830s. 

Modern-day Greeks have recoiled at the policies of domestic austerity that the country's creditors, notably Germany, have insisted upon as part of Greece's debt restructuring. But in historical context, austerity might not seem so bad: When Venezuela defaulted on German, British, and Italian debt at the start of the 20th century, Germany et al sent warships, set up a blockade, sank Venezuelan ships, and shelled Venezuelan military installations. Venezuela got the message, and the parties eventually agreed to U.S.-led mediation of the dispute.

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November 29, 2013