New Development Bank
Context: The Finance Minister of India recently attended the 5th Annual Meeting of the Board of Governors of the New Development Bank through video-conference.
About NDB: Brazil, Russia, India , China and South Africa (BRICS) are a multilateral development bank created by BRICS and other emerging economies and developing nations to finance the infrastructure and sustainable development projects. It was previously known as BRICS Development Bank.
- Fostering development of member countries.
- Supporting economic growth.
- Promoting competitiveness and facilitating job creation.
- Building a knowledge sharing platform among developing countries.
History:The idea to set up a new Development Bank to mobilize resources for infrastructure and sustainable development projects was first mooted at the fourth BRICS Summit in New Delhi (2012). The leaders agreed on the viability of the New Development Bank, according to the Finance Minister study at the fifth BRICS Summit in Durban in 2013. During the sixth BRICS Summit in Fortaleza (2014), the leaders signed the Agreement establishing the New Development Bank.
The leaders stressed in the Fortaleza Declaration that the NDB would enhance cooperation between the BRICS and complement the efforts of multilateral and regional financial institutions for global growth and development. To fulfil its purpose, the Bank supports public or private projects through loans, guarantees, equity participation and other financial instruments.
It is headquartered in Shanghai in China. It opened its first regional centre in South Africa, in Johannesburg.
Organisation:The main organs of the NDB are – Board of Governors, Board of Directors, President and four Vice-Presidents. The President is elected from one of the founding nations. The Vice Presidents are from each of the other four nations. Unlike the World Bank, which allocates capital-based votes, each participating country will be assigned one vote in NDB, and none of the countries will have veto power.
Key Areas of Operation:NDB funded projects are located within the following key areas of operation: Clean energy, Urban development, Environmental efficiency, Transport infrastructure, Social infrastructure, Irrigation, Water resource management and Sanitation. The Bank offers technical assistance for projects and participates in exchanges of knowledge ,culture and staff with the goal of contributing to environmental and social sustainability achievements.
The NDB's operations are aligned with the developmental aims and values of the United Nations. The New Development Bank secured observer status in the UN General Assembly in 2018, setting a strong basis for constructive cooperation with the UN.
Members:The BRICS nations (Brazil, Russia, India, China and South Africa) are the founding nations of NDB. NDB’s Articles of Agreement specify that all members of the United Nations could be members of the bank. However, the BRICS nations' share of voting power can never be less than 55 per cent.