New Development Bank

New Development Bank   (IGO)
Abbreviation	BRICS' NDB
Headquarters	Shanghai, China
Type	•  international •  financial
A multilateral development bank operated by the BRICS states as an alternative to the IMF and EIB

The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states (Brazil, Russia, India, China, and South Africa) as an alternative to the existing World Bank and International Monetary Fund (IMF). The NDB is setup to foster greater financial and development cooperation among emerging markets. It is headquartered in Shanghai, China and its first Chief Executive comes from India.

BRICS countries account for 46 percent of the world’s population – over 3 billion people, as of 2015 – making it the single largest bloc in terms of human capacity among global alliances. The scope of BRICS, combined with its increasing assertiveness as an economic power, has undoubtedly ruffled a few feathers in Washington D.C. and elsewhere in the West.

In March 2016, it was reported that the United States and its allies had taken action to undermine each BRICS member nation and destabilise them through political and economic means. Those leaders shown smiling and shaking hands at recent BRICS summits were either the targets of destabilisation efforts and subversion – as in the cases of Brazil, Russia, China and South Africa – or were a target of a military and political charm offensive, as in the case of India.

History

The term BRIC was introduced in the 2001 publication, Building Better Global Economic BRICs, by then-chairman of Goldman Sachs Asset Management, Jim O'Neill - originally developed in the context of foreign investment strategies (see comment below by Matthew Ehret).

“I have noticed a flurry of analysts commenting about the fraud of multipolarity based on the fact that a Goldman Sachs banker named Jim O'Neill came up with the idea after 9/11. Additionally, death cultists like Klaus Schwab have used the term "multipolarity" in a positive light which also fuels black pilled armchair opinionators to scream that everything is "controlled opposition'

Yes Goldman Sachs saw the emergence of the Russia-India-China alliance with Iran as an important partner emerging between 1997-2000 and yes they tried to co-opt it by creating a program to add biofuel basket case Brazil into the mix but the whole O'Neill program was based on speculative finance and tying the Eurasian powers around a set of bubbles centered at the time in Banco Santander and Brazil's biofuel market which could be detonated and destroy them from within.

At no time did Goldman Sachs or BlackRock ever promote large scale megaprojects like the BRI or INSTC programs that have become the defining character of the multipolar system. Sure once these projects are started they might try to get influence to disrupt them from within as investors but they have never and will never be the initiators of genuine projects that have the effect of 1) eliminating poverty, 2) empowering sovereign nation states.

The types of political economic systems geared around the increase of abundance, anti Malthusianism, poverty alleviation and cooperation among neighbours has no place in feudal capitalism systems extolled by those managing agencies like BlackRock, Goldman Sachs etc.”
Matthew Ehret (Jul 29 2023) 

Created in 2014

Hosted by Russia's Vladimir Putin leaders of Brazil, China, India and South Africa attend the 7th BRICS summit

The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa on 27 March 2013. On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the group of emerging economies signed the long-anticipated document to create the $100 billion BRICS Development Bank and a reserve currency pool worth over another $100 billion. Both will counter the influence of Western-based lending institutions and the dollar. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also signed. Shanghai was selected as the headquarters after competition from New Delhi and Johannesburg.

The first president of the bank was Vaman Kamath, the former Non-Executive Chairman of ICICI Bank, India’s second largest bank. The inaugural Chairman of the Board of directors came from Brazil and the inaugural chairman of the Board of Governors will be Russian.

The 7th BRICS summit, held on 8-9 July 2015 in the Russian city of Ufa in Bashkortostan, marked the entry into force of the Agreement on the New Development Bank.

$27.65 rising to $32.72 trillion

19 countries have requested to join BRICS

Original BRICS membership (GDP):

• 🇧🇷 Brazil: $2.08 trillion
• 🇷🇺 Russia: $2.06 trillion
• 🇮🇳 India: $3.74 trillion
• 🇨🇳 China: $19.37 trillion
• 🇿🇦 South Africa: $399 billion

Subtotal: $27.65 trillion

Applied for membership:

• 🇩🇿 Algeria: $206 billion
• 🇦🇷 Argentina: $641 billion
• 🇧🇭 Bahrain: $44 billion
• 🇪🇬 Egypt: $387 billion
• 🇮🇩 Indonesia: $1.39 trillion
• 🇮🇷 Iran: $367 billion
• 🇸🇦 Saudi Arabia: $1.06 trillion
• 🇦🇪 UAE: $499 billion

Total: $32.72 trillion

Structure and Objectives

Development Capital

BRICS Summit 2023 in Johannesburg, South Africa: President Putin says De-Dollarisation is irreversible

The NDB's primary focus of lending will be infrastructure projects with authorised lending of up to $34 billion annually. South Africa will be the African Headquarters of the Bank named the, "New Development Bank Africa Regional Centre". The bank will have starting capital of $50 billion, with capital increased to $100 billion over time. Brazil, Russia, India, China and South Africa will initially contribute $10 billion each to bring the total to $50 billion. Each member cannot increase its share of capital without all other 4 members agreeing. This was a primary requirement of India. The bank will allow new members to join but the BRICS capital share cannot fall below 55%.

Contingent Reserve Arrangement (CRA)

The objective of this reserve is to provide protection against global liquidity pressures. This includes currency issues where members' national currencies are being adversely affected by global financial pressures.

The Bank would also provide assistance to other countries suffering from the economic volatility in the wake of the United States' exit from its expansionary monetary policy.

This fund will consist of $10 billion of "paid-in capital" ($2 billion from each member to be provided over seven years) and an additional $40 billion to be "paid upon request". Out of the total initial capital of $100 billion, China will contribute $41 billion, Brazil, Russia and India would give $18 billion each, and South Africa would contribute $5 billion. It is scheduled to start lending in 2016 and be open to membership by other countries, but the capital share of the BRICS cannot drop below 55 percent.

NDB "complements" IMF/World Bank

NDB Chair Dilma Rousseff welcomes IMF's MD Kristalina Georgieva to NDB headquarters in Shanghai (September 2023)

In an August 2015 interview with independent journalist James Corbett, Devon Douglas-Bowers of the Hampton Institute argued that the BRICS' NDB "complements" the Bretton Woods institutions rather than rivalling them:

What are BRICS and the Asian Infrastructure Investment Bank (AAIB) really about? Many people argue that it is these countries challenging the dominate US-based system. How is that true or not true in some respects? Who is contending that the AIIB or the BRICS' New Development Bank is in any way competitive with the Bretton Woods institutions (IMF/World Bank)? Certainly not anyone involved with any of these institutions.

In March, IMF chief Christine Lagarde pledged IMF cooperation with the AIIB.

In June, World Bank chief Jim Yong Kim issued a statement congratulating the AIIB on its formation and calling it an "important new partner" for the Washington-led development bank.

In July, NDB President Kundapur Vaman Kamath returned the favour, conceding that the NDB and the IMF/World Bank are complementary institutions, not rivals.

Also in July, the AIIB and the World Bank signed an actual cooperation agreement, promising to identify projects for joint financing later this year.

No, these institutions do not view themselves as competitive. It is only various media pundits who have speculated that these new banks are in fact some sort of challenge to the so-called "Washington consensus." What none of these experts has bothered to report (for obvious reasons) is the remarkable fact that Paulo Nogueira Batista, Vice President of the NDB, is also an Executive Board member of the IMF, who then went on to pledge cooperation and joint action between the NDB and IMF. Also missing from this narrative is the fact that the NDB's chief, K.V. Kamath, is a former staffer of the supposed NDB "rival" Asia Development Bank. Or there's Jin Liqun, widely tipped to be the head of the AIIB, who also happens to be a former Vice President of the Asia Development Bank and alternative Executive Director of the World Bank.

In fact, the only sign that these Beijing-backed development banks pose any challenge to the existing order whatsoever is that the NDB has already confirmed that their first loan will be denominated in yuan, not dollars, and the AIIB is considering a basket of currencies, including the yuan.

But even this is not as much of a challenge to the Bretton Woods institutions as it appears on first glance. Although Beijing is obviously seeking to bolster the yuan as an international settlement currency, this is not being done in an effort to make the yuan itself a world reserve currency in the same way that the dollar is today. Instead, this is being done in service of a policy goal outlined by People's Bank of China Governor Zhou Xiaochuan in 2009 that is seeking to establish the "Special Drawing Rights" currency basket as the new world reserve currency.

China's goal is to have the yuan included in the SDR basket along with the dollar, yen, euro and pound. But the SDR itself is issued and administered by the IMF so once again we see that Beijing is not seeking to undermine these US-led hegemonic institutions at all, merely to increase their status and clout within these institutions.

External links

• BRICS announce $200B challenge to world financial order - Al Jazeera America
• BRICS launch new bank and monetary fund - Deutsche Welle Akademie
• The Brics development bank can release Africa from World Bank tyranny
• Listen to the sound of the Global South

 

Employee on Wikispooks

Employee	Job	Appointed
Dilma Rousseff	Chair	24 March 2023

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References

This page imported content from Wikipedia on 22 July 2014.
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