The New Development Bank became operational on Tuesday in Shanghai. It is driven by the five emerging powers, Brazil, Russia, India, China and South Africa, better known as BRICS.
The NDB will have an initial capital of 50 billion dollars to be equally funded by the five members who will have equal voting rights. The capital will be expanded to 100 billion dollars in the coming years.
“We will cooperate and collaborate with all development players. So our objective is not to challenge any of the existing system as it is, but to improve and complement the system in our own way,” explained NDB President Kundapur Vaman Kamath
Some observers have questioned the need for a BRICS bank which was conceived as an alternative to the World Bank and International Monetary Fund.
Both are seen by the new bank’s president to be “US-dominated”. Developing countries are set to benefit.
“The NDB will focus more on the needs of developing countries, respect their national conditions and better represent developing countries’ ideas. This will definitely enrich international development concepts, practice and experience and improve the efficiency development cooperation,” Chinese Finance Minister Lou Jiwei told those at the launch.
The NDB, it’s claimed, along with the Asian Infrastructure Investment Bank will break the monopoly position of the IMF and World Bank and promote the reform of the international financial system.
That’s the view of one analyst at the state – run Chinese think tank, the Shanghai Institute for International Studies.