Despite fierce US opposition to its creation that led to the withdrawal of South Korea, Indonesia and Australia, the support and insistence of China and India ensured the formal announcement to set up the Asian Infrastructure Investment Bank late last month.

The importance stems from the bank’s enormous capabilities and the competitiveness it can offer to traditional financial institutions, such as the World Bank and the International Monetary Fund which are dominated by Washington. The US does not want to see a competitor to the two multilateral institutions, noting that global rules are changing rapidly — a fact that must be taken into consideration.

China and India are now major powers in their own right, not “banana republics”, and the US has lost much of its influence in global relations for many economic and strategic reasons. This has led small and big countries alike to overlook the pressure it exerts.

Apart from economic reasons, there are also factors stemming from the recent domestic standing of President Obama, and an image has been reinforced of perpetual hesitation on key issues and which can be one of the worse characteristics in a politician. This is simply because hesitation leads to uncertainty, a lack of intent and fear of taking decisions. These characteristics of President Obama have been fodder for his rivals to belittle him.

This is clearly manifested in the way Obama handles the dossiers of the issues around Syria, the Islamic State in Iraq and the Levant (Daesh) and Iran’s nuclear programme. Political hesitation is quite different from reviewing and correcting previous positions, which requires courage to re-evaluate wrong decisions.

The important thing is that the Asian Investment Bank has been established with the support of the world’s second-largest economy and Asia’s third-largest economy, which gives it a big boost. It is likely that South Korea, Australia and Indonesia will join sooner or later due to its significance in financing infrastructure projects without which talking about real development makes no sense.

According to studies, the Asian continent will need infrastructure projects estimated at $800 billion over the next five years, with the new bank financing a number of these and which would not have been funded by the World Bank and the IMF due to their magnitude.

Apart from the new bank, there are financial institutions that are no less important such as the recently created BRICS bank, and those financial institutions in the European Union. There too member countries are seeking to reduce the US domination over international banking and financial transactions, an issue that has become a matter of vital interest to many countries.

What brings all these countries and economic blocs together is the need to break up the US monopoly and dominance over financial relations. This is possible through the establishment of parallel or alternative institutions in view of the weak US economy and its deteriorating structural problems. Without shale oil and gas production it would have deteriorated further.

These developments will lead to the creation of a multipolar banking and financial system that can end Washington’s monopoly over the world of finance and business since the Bretton Woods Treaty, which was signed after the Second World War. Such a transition would greatly serve world economies, allow it to finance significant projects, especially in infrastructure, industry, agriculture, technology and communications.

For Arab countries, overcoming the disastrous subsequences of the so-called “Arab Spring” and restoring stability would contribute to the setting up of similar Arab financing institutions that can play a key role in reconstruction after the devastation of the last four years. This is vital for resolving many development-related issues, including unemployment and economic inequality.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.