New Development Bank
| Abbreviation | NDB, or NDB BRICS |
|---|---|
| Formation | July 2014 (Treaty signed) July 2015 (Treaty in force) |
| Type | International Financial Institution |
| Legal status | Treaty |
| Headquarters | Shanghai, China |
|
Membership
|
|
|
President
|
K. V. Kamath |
| Website | http://newdevelopmentbank.int |
The New Development Bank (NDB), formerly referred to as the BRICS Development Bank,[1] is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the existing American and European-dominated World Bank and International Monetary Fund.[2] The goal of the bank is to "mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries".[3] The bank is headquartered in Shanghai, China.[4] Each participant country holds an equal number of shares[3] and equal voting rights, and none of the countries will have veto power.[5] There will be 1 million shares with a value of USD 100 000 (initially USD 500 000 shares), 20% of which will have to be directly paid in to the bank in the first 7 years after entry into force.[3]
Contents
History[edit]
The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in Delhi. The creation of a new development bank was the main theme on the agenda for the summit.[6] BRICS leaders agreed to set up a Development bank at the 5th BRICS summit held in Durban, South Africa on 27 March 2013.[2]
On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed the Agreement on the New Development Bank, which is after its entry into force to form the legal basis for the bank.[3] The Agreement contains the Articles of Agreement of the Bank, and stipulates the total capital of $100 billion BRICS Development Bank, 12.5% of which is to be paid in by the members in the first 7 years. In a separate agreement, a reserve currency pool worth over another $100 billion was setup.[7] Both are partly motivated by the desire to counter the influence of Western-based lending institutions. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also signed.[8]
Shanghai was selected as the headquarters after competition from New Delhi and Johannesburg. An African regional center will be set up in Johannesburg.[9]
The first president will be from India,[10][11] the inaugural Chairman of the Board of directors will come from Brazil [4] and the inaugural chairman of the Board of Governors will be Russian.[4]
The 7th BRICS summit in July 2015 marked the entry into force of the Agreement. On 11 May 2015, K. V. Kamath was appointed as President of the Bank.[12]
Structure and objectives[edit]
Composition and power[edit]
According to the Articles of Agreement, the main organs of the bank are
- Board of (ministers)[13]
- Board of Directors
- President, Vice-Presidents
Development capital[edit]
The bank's primary focus of lending will be infrastructure projects [14][15] with authorized lending of up to $34 billion annually.[15] South Africa will be the African Headquarters of the Bank named the "New Development Bank Africa Regional Centre".[16] The bank will have starting capital of $50 billion, with capital increased to $100 billion over time.[17] Brazil, Russia, India, China and South Africa will initially contribute $10 billion each to bring the total to $50 billion.[16][17] Each member cannot increase its share of capital without all other 4 members agreeing. This was a primary requirement of India.[18][19] The bank will allow new members to join but the BRICS capital share cannot fall below 55%.[17]
Members[edit]
The agreement entered into force in July 2015, with the ratification of all 5 states that have signed the Agreement on the New Development Bank.
Founding Members
| Country/Region | Date of Accession |
|---|---|
| 2015 | |
| 2015 | |
| 2015 | |
| 2015 | |
| 2015 |
[edit]
The following table are amounts for 5 countries by shareholding at the New Development Bank.[3]
| Country | Number of Shares |
Shareholding (% of Total) |
Voting Rights (% of Total) |
Authorised Capital (billion USD) |
|---|---|---|---|---|
| 100,000 | 20 | 20 | 10 | |
| 100,000 | 20 | 20 | 10 | |
| 100,000 | 20 | 20 | 10 | |
| 100,000 | 20 | 20 | 10 | |
| 100,000 | 20 | 20 | 10 | |
| Unallocated Shares | 500,000 | - | - | 50 |
| Grand Total | 1,000,000 | 100 | 100 | 100 |
Reception[edit]
In June 2015, Jim Rogers said that he does not see any current alternative to US dollar and that “The world needs something to compete with the US-dominated institutions, some of them - the World Bank and the IMF. So, if BRICS offer any new structures that can compete with these long-standing ... institutions, it will be very good.”.[20]
See also[edit]
BRICS Contingent Reserve Arrangement
References[edit]
- ^ "BRICS Bank to be headquartered in Shanghai, India to hold presidency". Indiasnaps.com. 16 July 2014
- ^ a b Powell, Anita. "BRICS Leaders Optimistic About New Development Bank". Voice of America. Retrieved 27 March 2013.
- ^ a b c d e "Agreement on the New Development Bank – Fortaleza, July 15". Government of Brazil. 15 July 2014.
- ^ a b c Lewis, Jeffrey; Trevisani, Paulo. "Brics Agree to Base Development Bank in Shanghai". The Wall Street Journal. Retrieved 16 July 2014.
- ^ Prabhat Patnaik (27 July 2014). "The BRICS Bank". People's Democracy. Retrieved 27 July 2014.
- ^ "BRICS Summit 2012: A long Journey to cover; Overview, Outcomes and Expectations". The World Reporter. 31 March 2012. Retrieved 31 March 2012.
- ^ "Brics nations to create $100bn development bank". BBC.com. 15 July 2014
- ^ "BRICS establish $100bn bank and currency reserves to cut out Western dominance". RT.com. 15 July 2014
- ^ http://news.yahoo.com/cabinet-welcomes-brics-development-bank-115111670.html
- ^ http://timesofindia.indiatimes.com/business/international-business/BRICS-Development-Bank-launched-first-president-to-be-from-India/articleshow/38440605.cms
- ^ "India Gets First Presidency Of The BRICS Bk". Bloomberg TV India.
- ^ "K V Kamath, non-executive chairman of ICICI, is now BRICS Bank head". Hindustan Times (New Delhi). 11 May 2015. Retrieved 16 May 2015.
- ^ "Agreement - NDB BRICS". Agreement - NDB BRICS. Incomedia WebSite X5 Home 10.1.12.57 - www.websitex5.com.
|first1=missing|last1=in Authors list (help); - ^ "What the new bank of BRICS is all about". The Washington Post. 17 July 2014. Retrieved 20 July 2014.
- ^ a b "New BRICS Bank a Building Block of Alternative World Order". The Huffington Post. 18 July 2014. Retrieved 20 July 2014.
- ^ a b "BRICS countries launch $100 billion developmental bank, currency pool". Russia & India Report. 16 July 2014. Retrieved 20 July 2014.
- ^ a b c "BRICS Bank ready for launch - Russian Finance Minister". Russia & India Report. 10 July 2014. Retrieved 20 July 2014.
- ^ "Indian media: Brics bank 'a step in right direction'". BBC. 16 July 2014. Retrieved 20 July 2014.
- ^ "Victory for Modi, India as BRICS summit clears setting up of a new development bank". India Today. 16 July 2014. Retrieved 20 July 2014.
- ^ "World Bank & IMF ‘corroded’ – Jim Rogers to RT". Retrieved 11 September 2015.
External links[edit]
- The Sino-Brazilian Principles in a Latin American and BRICS Context: The Case for Comparative Public Budgeting Legal Research Wisconsin International Law Journal, 13 May 2015
- BRICS announce $200B challenge to world financial order - Al Jazeera America
- What the BRICS are Building. The Harvard Crimson. 1 September 2014. Retrieved 3 September 2014.
- BRICS launch new bank and monetary fund - Deutsche Welle Akademie
|
||||||||||||
|
||||||||||||||||||||||||||||