Established in 2015 by BRICS countries, the NDB is a multilateral development bank for mobilising resources for infrastructure and sustainable development projects in BRICS and other EMDCs.
The establishment of the BRICS New Development Bank in 2015 was a manifestation of a significant power shift in the international system from the West to the emerging market countries like China, Brazil and India and perhaps the clearest signal of the commitment of the countries to reform the international financial system which they had argued was biased against developing countries.
However, its membership is poised to grow in the future in light of the recent BRICS expansion, which saw five countries – the United Arab Emirates, Egypt, Ethiopia, Saudi Arabia and Iran becoming permanent members. As the membership is open to all UN member states, as per Article 2 of the agreement establishing the NDB, other non-BRICS countries are also eligible.
This is different from traditional development banks like the World Bank where the US enjoys a veto power or the Asian International Infrastructure Bank where China’s 26.6% shareholding grants it effective veto power over decisions it does not agree with as decisions require a 75% majority. Established development banks like the World Bank and the African Development Bank have long been criticised in developing countries for delays in the approval of loan applications which is detrimental to their development.
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