The 7th Annual Meeting of the Board of Governors of the New Development Bank (NDB) was recently held, with the Union Minister of Finance & Corporate Affairs and India’s Governor for the NDB presiding over the event. The meeting was also attended by representatives from Brazil, China, Russia, South Africa, Bangladesh, and UAE. The theme of this year’s annual meeting was “NDB: Optimising Development Impact”.
Key Takeaways from the Meeting
The Finance Minister emphasized the importance of multilateralism and global cooperation for economic recovery. He recognized the NDB’s successful establishment as a reliable development partner for emerging market economies. As India is celebrating 75 years of Independence this year, he outlined India’s robust economic growth in the current financial year, estimated at 8.9%, the highest among large economies. This growth is indicative of India’s resilience and quick recovery.
The Finance Minister further expressed confidence that India will maintain this high growth rate in the present and upcoming financial year.
About the New Development Bank
Founded by BRICS countries (Brazil, Russia, India, China, and South Africa) at the 6th BRICS Summit in Fortaleza, Brazil in 2014, the New Development Bank is a multilateral entity. The bank supports infrastructure and sustainable development efforts in BRICS and other underserved, emerging economies through innovation and cutting-edge technology.
The NDB’s headquarters are in Shanghai, China. In 2018, it received observer status in the United Nations General Assembly, solidifying its potential for active and fruitful cooperation with the UN.
Objectives of the New Development Bank
The NDB aims to foster the development of member countries. It supports economic growth, promotes competitiveness, facilitates job creation, and establishes a knowledge sharing platform among developing countries.
Understanding the New Development Bank
Commonly known as the BRICS Development Bank, the New Development Bank was set up by BRICS member states to bolster cooperation and supplement the multilateral and regional financial institutions’ efforts for global development. The bank’s initial authorized capital was $100 billion, with an initial subscribed capital of $50 billion, equally shared among founding members.
Fortaleza Declaration in Context
The Fortaleza Declaration, announced at the 6th BRICS summit in 2014, resulted in the establishment of the New Development Bank. It agreed on setting up the NDB with a $100 billion corpus, evenly divided among all the BRICS nations. This would mobilize resources for infrastructure and sustainable development projects in BRICS. It also agreed on a Contingent Reserve Arrangement (CRA) with an initial size of $100 billion to tackle short-term liquidity demands.