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The BRICS sixth summit that was is held in Brazil on 16th and 17th July 2014 was the opportunity for 5 emerging countries (Brazil, Russia, China, South Africa and India) to officially announce the creation of their bank of development, the New Development Bank (NDB).
The New Development Bank (NDB), a new financial institution, will be endowed with a 50 billion dollar capital. Contributions will be made at equal share (that is 10 billion by country). The New Development Bank that will be effective in 2016 will have for main activity, the financing of infrastructure and sustainable development projects.
The rotating chair of the institution will be occupied for the first time by India. The head office on the other hand will be based in Shanghai. South Africa will be satisfied itself with a regional centre of the Bank while Brazil will take the management of the meeting board. The management of the governors’ council of the Bank will come to Russia.
The New Development Bank (NDB) which founding countries count more the half of the world population and 20 % of the world GDP aspires to weaken any power of the World Bank and the International Monetary Fund (IMF).
The capital of the new bank could double in the next years with the arrival of new shareholders. The BRICS will maintain in any case the majority of the shares of the bank (55 %).
As reminder, the BRICS sixth summit also released one 100 billion dollar as capital reserves.
Original text by: Roger ADZAFO