New Development Bank
The BRICS nations—Brazil, Russia, India, China, and South Africa—created the NDB, an international financial agency.
The mission of the NDB is to support infrastructure and sustainable development initiatives in the BRICS nations, other developing nations, and emerging markets.
Instead of countering the western-dominated international financial institutions like the World Bank and the International Monetary Fund, the NDB is envisioned as a developmental financial agency that may work with them.
Historical Evolution:
2014 was the founding year of NDB. At the 4th BRICS Summit in New Delhi in 2012, India put forward the proposal for the NDB, and the formation treaty was signed in 2014 at the 6th BRICS Summit in Fortaleza, Brazil.
The presidents emphasized in the Fortaleza Declaration that the NDB will enhance BRICS collaboration and support multilateral and regional financial institutions' efforts for global development.NDB was earlier titled as BRICS Development Bank.
Key Objectives:
- To encourage the development of member nations.
- To promote economic expansion.
- To encourage competition and aid the creation of jobs.
- To create a forum for emerging nations to share information.
Composition and Membership: Brazil, Russia, India, China, and South Africa are the Bank's five founding members. According to the Articles of Agreement, all United Nations members are permitted to join the Bank. However, the percentage of BRICS countries must always account for at least 55% of the voting power.
Some experts believe that the NDB's long-term development depends on its membership growth since it will support the Bank's business expansion. The NDB intends to gradually increase membership so as not to unduly burden its operational and decision-making ability, in accordance with the Bank's General Strategy: 2017-2021.
Governance of NDB: A Board of Governors oversees the NDB. The BRICS countries' finance ministers make up the Board. Each member's portion of the NDB determines their voting power. The right to vote is currently equal among all members.
The NDB's president is chosen from among its member nations. The remaining four members elect four vice presidents. India's K. V. Kamath served as the NDB's first president. Marcos Prado Troyjo is Brazil's second and current President (from 2020).
Key areas of NBD,(Picture credit:New Development Bank)
NDB's projects in India: Some vital projects of NDB in different fields are mentioned further.
- Agriculture: Rajasthan Water Sector Restructuring Project
- Sustainable Development: Madhya Pradesh Multi Village Water Supply Project
- Renewable Energy: Canara Bank Renewable Energy Financing Scheme, Madhya Pradesh Major District Roads Project
- Transportation: Bihar Rural Roads Project, Madhya Pradesh Bridges Project, Mumbai Metro Rail Project, Assam Bridge Project, Andhra Pradesh Road Sector Project
How does NDB vary from AIIB(Asian Infrastructure Investment Bank)?
While the NDB has five BRICS nations, the AIIB has 57 nations, mostly in Asia and the Pacific. Each member of the NDB has one vote, and choices are made through a straightforward voting process, making decision-making more democratic.
In contrast, voting shares in the AIIB are determined by each member country's GDP (in PPP terms), not by a contribution to the Bank's authorized capital. China, India and Russia are the three countries on top of the shareholding ladder.
