A new special section of journal articles published by Global Policy and delves into the evolution and growth of the New Development Bank (NDB) and the BRICS alliance. This collection of 10 articles, authored by esteemed scholars from around the world, examines the NDB’s development and its place in the global financial landscape. It also explores the distinctive aspects of the NDB’s governance compared to other multilateral development banks, the reasoning and effects behind expanding its membership and enhancing multipolarity, as well as the ongoing organisational changes within the NDB.
Here are five highlights from these fascinating articles.
1. Expansion Amid Global Turmoil: Despite much of the world being in shutdown during late 2021 due to the COVID-19 pandemic, the NDB took a bold step by welcoming four new nations into its fold: Bangladesh, the United Arab Emirates (UAE), Uruguay, and Egypt. This expansion marked the first addition of new members since the NDB’s inception by the BRICS nations (Brazil, Russia, India, China, and South Africa). The move, though not widely covered in mainstream media, drew significant attention from scholars and policymakers interested in global development and the dynamics of multilateral development banks (MDBs).
2. A Unique Governance Model: One of the distinguishing features of the NDB compared to traditional MDBs is its governance structure, which emphasises equality and consensus among its members. Unlike the World Bank, where major powers hold significant decision-making sway, the NDB ensures equal financial contributions and voting rights among its founding members. This structure is designed to reflect the principles of equal partnership and shared responsibility, setting it apart from other international financial institutions where the power dynamics often favor wealthier nations.
3. The Push for Multilateralism and Inclusivity: The addition of new members has brought a renewed focus on the NDB’s commitment to fostering a multipolar world order and supporting the development agendas of emerging economies. With the new members, the NDB aims to enhance its inclusivity and represent a broader spectrum of global voices. This strategic expansion aligns with the NDB’s goal of differentiating itself from Western-led financial institutions by prioritising projects that align with the development needs and priorities of the Global South.
4. Strategic Innovations and Operational Challenges: The NDB has adopted several innovative strategies to set itself apart, including a focus on sustainability and the use of local currencies to mitigate exchange rate risks. However, the bank faces operational challenges, particularly in scaling up its lending operations and maintaining its lean staffing model. Some experts argue that this approach might limit the NDB’s capacity to influence global policy and drive substantial change in the development finance landscape.
5. Future Directions Under New Leadership: The arrival of Dilma Rousseff as NDB President in 2023 has signaled a potential shift towards a more ambitious agenda. Under her leadership, the NDB is likely to place greater emphasis on supporting inclusive growth, especially in regions like Africa, and expanding its influence through strategic partnerships and increased use of local currencies. Rousseff’s vision includes building on the bank’s achievements while navigating the complex geopolitical landscape, ensuring that the NDB remains a key player in promoting sustainable development and financial stability globally.
As the NDB moves into its second decade, its ability to adapt and innovate will be crucial in determining its impact on the global financial architecture. With a unique governance model and a clear focus on the needs of emerging economies, the NDB stands poised to redefine the role of multilateral development banks in a rapidly changing world.
Read a more comprehensive summary here.
