New Development Bank's role in the global financial architecture

Abstract

AbstractThe New Development Bank (NDB) was established in 2015 by the grouping of Brazil, Russia, India, China, and South Africa (referred to as the BRICS). The establishment of the NDB was one of the outcomes of the economic and political dissatisfaction arising out of the growing disparity between the BRICS' development needs, their share of the world economy, and their representation in the established institutions of the global financial architecture. The paper examines the origins of NDB, the unique aspects of its governance structure, innovations in its operational model, and the challenges it currently faces. The paper concludes that 9 years after its establishment, NDB has completed the core foundational work required of a new multilateral development bank. It is undoubtedly an interesting experiment in the creation of a new international financial institution, and it has made a good and solid start. However, the current global environment is very different from the world of 9 years ago. If the NDB can navigate well the current challenges and if it can scale up significantly, then the NDB indeed has the potential to make a significant impact on the global architecture of development finance. Whether it does so, remains to be seen.