Friday, April 3, 2015

A Foreign Policy Black Eye for Obama

This piece was first posted in newly reformatted online Asia Times.

Month of March has not been kind to the worldwide image of Uncle Sam. First Bibi Netanyahu came calling, uninvited by President Obama, and proceeded to tell him how the U.S. should deal with Iran.

Obama declined to appoint Netanyahu as America’s special envoy to Iran, but Bibi got the last laugh as the afterglow of his appearance before the joint session of Congress in Washington gave him a landslide mandate in Tel Aviv.

At least Obama can console himself that Bibi didn’t single-handedly make him look bad but was much abetted by Speaker John Boehner and the House Republicans. This merry band on the hill didn’t care much for the niceties of diplomatic protocol if it means they could embarrass their own sitting president.

Obama’s stand on China’s Asian Infrastructure Investment Bank, AIIB, on the other hand, was a self-inflicted black eye with no better explanation than as another consequence of American hubris.

Officially, Obama proclaimed that with Asian Development Bank and World Bank functioning just fine under American and Japanese leadership, there is no need for AIIB. He asked America’s European allies, Australia, Japan and South Korea not to join the new bank.

The first to bolt was U.K., America’s heretofore closest ally. All the rest pile in so as to not miss out being a founding member.

When the formation of AIIB was announced in October, there were 21 countries that signed on.  By the March 31 deadline, 46 countries have applied to be founding members. (The final tally of founding nations was 57.)

Every country Obama asked not to join, has, except a wavering Japan that almost caved.

Obviously, the prestige of the American presidency was not enough to dissuade the allies of the perceived importance of becoming a founding member of AIIB.  

How the infrastructure investments in Asia will reward the members of the bank remains to be seen. But clearly the forty some countries have confidence in China’s leadership and did not want to miss the boat. Their stampede makes the American position seem petty and hollow.

Everybody sees Asia to be the fastest growing region in the world. Infrastructure investments will accelerate and facilitate that economic growth. People of Asia will enjoy unrivaled prosperity and rest of the world will benefit by doing business with Asia.

China has already demonstrated that they know how to make large infrastructure investments in China and turn such investments into unparalleled economic growth. They have a proven track record to lead the new investment bank.

Alas for the U.S., the American leaders from the president on down are so imbued with the belief of American exceptionalism that America finds it hard to conceive that others can be exceptional in their own ways. 

Since the collapse of the Soviet Union and the end of the Cold War, the U.S. has gone around the world as the only hegemon standing. The American foreign policy is basically one of “do as I tell you.”

After the financial crisis of 2008, China as America’s largest creditor had quietly approached Washington for a more equal role in dealing world problems of common interest. However, even if the Obama administration was receptive, Congress was having none of that. America’s rebuff had caused China to find other ways to exert their influence.

One of the most prominent ways has been for China to make investments in hospitals, schools, roads and other infrastructure around the world to be paid with resources, most notably in Africa and Latin America. Their win-win approach has been popularly received and may be another reason why other countries find AIIB appealing.

America’s win-lose approach to world affairs has cost the U.S. trillions in Afghanistan and Iraq and created a vast zone of instability from Ukraine through the Middle East to sub-Sahara Africa. To restore stability, the U.S. needs to revise the my-way-or-the-highway approach and admit that they need to collaborate with other stakeholders.