The Role of AIIB in the ‘New Normal’ Era for Indonesia and ASEAN

César González Palomo via Flickr (CC BY-SA 2.0)

History shows that trade and industrialization were the keys to economic development in East Asia and Southeast Asia. But situations change. The current rise in economic nationalism leads one to ask: Can Southeast Asian nations, including Indonesia, still use the old recipe of open trade and industrialization? Does economic cooperation still have a place? Against the backdrop of a changing trade environment and creeping protectionism under the Donald Trump US administration and amid lackluster global growth, the question that we must ask is, what can Indonesia and other Southeast Asian nations do given these conditions? This essay will specifically examine how the Asian Infrastructure Investment Bank (AIIB) can play a role in this situation. This essay argues that to overcome the anti‐globalization sentiment, it is necessary to create regional cooperation success stories from policies that are politically feasible and economically sound. There are several candidates for such success stories, including using the ASEAN Infrastructure Fund to develop ASEAN connectivity. The AIIB together with the ADB can play an important role here.