More than 45 countries have signed up to be a part of the China-led Asian Infrastructure Investment Bank but Brazil is the only Latin American country that has committed to the bank.
Australia, France, the United Kingdom, Germany, India, Italy, and South Korea are among the nations that have said they will join the AIIB, which has received the blessing of International Monetary Fund chief Christine Lagarde. The new bank plans to invest $100 billion in infrastructure projects in Asian countries. China also has its "One Belt, One Road" strategy, an initiative to promote economic and cultural ties with countries involved.
Kevin Gallagher, an associate professor at the Frederick S. Pardee School of Global Studies at Boston University and co-director of the Global Economic Governance Initiative, said that Latin American nations in many ways have their own version of AIIB.
"Latin America already enjoys China as a member of the Inter-American Development Bank, China-CELAC (Community of Latin American and Caribbean States) which has set up approximately $35 billion in funds with Latin America, and of course China's policy banks provide upwards of $119 billion in finance to the region," he said.
The United States initially tried to discourage allies from joining the AIIB, seeing it as a challenge to the World Bank and Asian Development Bank over which it has considerable influence. Washington also questioned whether the AIIB will uphold international standards of governance, and social and environmental safeguards.
Analysts have said the creation of the AIIB reflects China's growing economic and diplomatic might as well as its desire to harness this economic power for political purposes.
Rather than reflecting the influence of US opposition, Harold Trinkunas, who directs the Brookings Institution's Latin America Initiative, said most Latin American countries have not joined AIIB for reasons related to domestic economics and politics.
"Many now face the prospect of an economic slowdown, and some of the larger countries are also facing political scandals at home. Given there is a requirement to contribute capital as a founding member, many governments may face public perception that the required capital contribution would be better spent at home," said Trinkunas.
"In addition, Latin America already has two major regional development banks, the Inter-American Development Bank and the Corporacion Andina de Fomento, and most countries can also borrow from international capital markets, so joining another development bank does not appear to be as urgent as it may be to other founding members."
Professor Enrique Dussel Peters at the Universidad Nacional Autónoma de Mexico said the "One Belt, One Road" initiative does not specifically affect Latin America.
The strategy is "very open to different countries and continents, and has mentioned countries from Asia, Europe and even Africa, but there is not a single word on Latin America and the Caribbean," he said.
Peters speculated on why Brazil is the only Latin American nation to sign up for the bank.
"As a result of the reluctance of the US to join the AIIB, the already existing cooperation between Latin American countries and China as well as insufficient understanding of AIIB and its openness to Latin American countries－these are some of the reasons why the region has been slow or hesitant to participate explicitly," he said.
