In recent years, a number of countries have chosen to join the Asia Infrastructure Investment Bank (AIIB), which has become a major player in the global financial architecture in record time. The AIIB promises to be "lean, clean and green". In truth, it seems to be an instrument to promote Chinese interests. The analysis of Korinna Horta after three years of AIIB is very sobering. What can you do now? Is it time to acknowledge a total failure and leave the bank? What influence do shareholders still have and what should they push for?
This article explores how growth of the finance sector can overtake growth in the "real" economy, including manufacturing or trade, and depress wages as returns to capital are protected or increased. In developing and emerging countries, financialisation deepens the vulnerability of local financial systems when they are subject to the volatility of global capital markets and the interest rate decisions of large countries, particularly the US. Without proper controls, financialization can redirect the development process towards securing the profits of private companies and private finance.
