Published on: August 20, 2021
NEW DEVELOPMENT BANK
What is in news : Recently, during BRICS meet, India proposed that New Development Bank’s scope be expanded to strengthen Social Infrastructure besides promoting industry.
- Social Infrastructure includes the construction and maintenance of facilities that support social services such as healthcare, education, and housing.
- India is the chair of the BRICS grouping for 2021.
About New Development bank
- It is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa).
- The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa in 2013.
- It was established in 2014, at the 6th BRICS Summit at Fortaleza, Brazil.
- The bank is set up to foster greater financial and development cooperation among the five emerging markets.
- In the Fortaleza Declaration, the leaders stressed that the NDB will strengthen cooperation among BRICS and will supplement the efforts of multilateral and regional financial institutions for global development.
- The bank will be headquartered in Shanghai, China.
- Unlike the World Bank, which assigns votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and none of the countries will have veto power.
- Roles and functions:
- Mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries
- Supplement existing efforts of multilateral and regional financial institutions for global growth and development.
- BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
- In 2001, Goldman Sachs’ Jim O’Neill authored a paper called “Building Better Global Economic BRICs”, pointing out that future GDP growth in the world would come from China, India, Russia and Brazil.
- The BRICS Leaders’ Summit is convened annually.
- BRICS does not exist in the form of organization, but it is an annual summit.
- The Chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.
- Together, BRICS accounts for about 40% of the world’s population and about 30% of the GDP (Gross Domestic Product), making it a critical economic engine.
- It’s an emerging investment market and global power bloc