In around three years of existence, critically discuss what change the New Development Bank has been able to bring in global / regional economic and political power.
Published: November 17, 2017
New Development Bank was established by members of BRICS countries in 2015. The creation of the New Development Bank was aimed at addressing a massive infrastructure funding gap in the member countries, which account for almost half the world’s population and about one-fifth of global economic output. So far, the Bank has committed USD$1.5 billion in loans to member countries with a strong emphasis on renewable energy. Furthermore, plans are on track to reach the target $2.5 billion of loan commitments by end of 2017. This will pave the way to reach between $10 billion and 15 billion of loans by 2021.
Some of the changes happened with the establishment of BRICS banks are as follows:
- Establishment of BRICS New Development Bank has not only boosted the common development of the five member countries, but has also injected fresh driving force into the mechanism’s leading role in South-South cooperation.
- The Bank allows the BRICS to reduce their overwhelming dependence on the US dollar.
- The establishment of NDB put pressure on IMF to make some changes to the voting rights of developing countries.
- The Bank also helps in project preparation which the major problem is facing most African countries which helps for the regional development.
Ultimately the competition between the BRICS bank and the IMF and World Bank should be about efficiency rather than a struggle between liberal vs. alternative economic philosophies.
Model Questions Category: 057 - Important International Institutions Agencies and Fora