{"id":50025543,"date":"2019-04-03T14:23:39","date_gmt":"2019-04-03T11:23:39","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=25543"},"modified":"2023-06-16T23:16:34","modified_gmt":"2023-06-16T20:16:34","slug":"25543-ndb-slow-to-deliver-on-promises","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/25543-ndb-slow-to-deliver-on-promises\/","title":{"rendered":"NDB slow to deliver on promises"},"content":{"rendered":"

So much has changed in the political and economic landscapes of Brazil, Russia, India, China and South Africa since they launched<\/a> a new bank tasked to support sustainable infrastructure development in 2014.<\/p>\n

With each BRICS member country hit by some crisis in the past five years, the New Development Bank<\/a> (NDB) met in Cape Town, South Africa, this week charged by critics as opaque and having failed to establish the promised new model for financing development.<\/p>\n

\u201cThe bank has been very slow to produce results,\u201d Paulo Nogueira, the NDB\u2019s vice-president from 2015 to 2017, told Di\u00e1logo Chino<\/em>. \u201cFor a bank that had the aspiration of becoming a global bank, still having five members after almost four years is very little.\u201d<\/p>\n

Lack of transparency<\/h2>\n

Transparency was a key value<\/a> promoted by the NDB. Yet, three years after it became fully operational, its decision-making process still baffles observers.<\/p>\n

You expect us to pay for something when we don\u2019t know how deep the hole is?<\/p><\/blockquote>\n

Lumkile Mondi, an economics professor at the University of the Witwatersrand in Johannesburg, can\u2019t understand why the NDB decided to loan US$180 million to utilities company Eskom<\/a>, which is severely in debt and mired in a sprawling corruption scandal<\/a>.<\/p>\n

The NDB\u2019s website says the loan<\/a> is part of a set <\/a>of disbursements planned to aid Eskom and integrate renewable energy into the national grid but the bank did not respond to Mondi when he questioned the deal.<\/p>\n

\u201cEveryone is worried about the probability of default. But the New Development Bank gave them a loan. We wondered: how did they reach this decision, given that no one was willing to fund it?\u201d he asked.<\/p>\n

\u201cYou expect us to pay for something when we don\u2019t know how deep the hole is?\u201d<\/p>\n

Heavy on rhetoric, light on proof<\/h2>\n

Environmentalists were hopeful of the NDB\u2019s promise to go beyond the standard pledge of not harming the environment to being an agent for a broader transition to a more sustainable form of development.<\/p>\n

If the bank really wants to be what it promises – a modern, green institution, based on sustainable development – it will need to be even more transparent than traditional institutions<\/p><\/blockquote>\n

However, it hasn\u2019t ruled out<\/a> \u2018dirty\u2019 energy projects, such as coal.<\/p>\n

Li Xlulan, from Chinese environmental research group Greenovation: Hub<\/a> said that even though the NDB has no coal projects in its current portfolio, the bank should make a commitment to prohibiting investment in the fossil fuel.<\/p>\n

\u201cWe suggest the NDB clarify their coal finance policy in their statement…in order to support the low carbon transition in recipient countries via more resilient and sustainable investments.”<\/p>\n

While the bank says it invests<\/a> a great share of its resources in sustainable development projects such as Eskom\u2019s, it doesn\u2019t share the criteria it uses to decide whether a project is environmentally-friendly or not.<\/p>\n

Nor does it doesn\u2019t offer detailed explanations of how a project will work or why it was approved.<\/p>\n

\u201cIf the bank really wants to be what it promises; a modern, green institution, based on sustainable development, it will need to be even more transparent than traditional institutions,\u201d said Julia Cruz, an advisor to Brazilian rights NGO Conectas.<\/p>\n

Cruz said the bank has been receptive to Conectas\u2019 recommendations on how to make its lending criteria clearer but lacks information on whether it will introduce them or not.<\/p>\n

\u201cIt\u2019s a positive step forward, at least from a rhetorical point of view,\u201d she said, adding that the bank itself, which already backs 34 projects<\/a>, conceded it often lacks the human resources to respond to questions.<\/p>\n

Slowly but not so surely<\/h2>\n

Though the NDB has announced billions of dollars in loans, it has disbursed scarcely US$380 million.<\/p>\n

\n

$380million<\/p>\n

\n
\nhas been disbursed by the NDB. It has approved loans of US$6.7 billion
\n\n <\/div>\n <\/div>\n

Nogueira said he believes the bank\u2019s problems are rooted in both administrative issues and global politics.<\/p>\n

Russia faced economic sanctions for its annexation of Crimea; the relationship between India and China has been tested by the latter\u2019s financial support of Pakistan; China\u2019s own economic growth has slowed, hindered of late by a trade spat with the US; and domestic political crises toppled governments in Brazil and South Africa.<\/p>\n

For a nascent multilateral institution, such complicated issues have proven challenging.<\/p>\n

Nonetheless, Nogueira said the bank lacks talent and has been unable to get positive coverage for its projects. \u201cThe bank kind of went off the grid,\u201d Nogueira said.<\/p>\n

Brazil will pick the bank\u2019s new president next year as the five-year mandate awarded to India\u2019s Kundapur Vaman Kamath ends.<\/p>\n

Nogueira said Brazil was the bank\u2019s most diplomatic member but that political and economic crises since 2014 meant the country has taken a back seat in the NDB. He said Brazil could overcome the obstacles the current administration faced.<\/p>\n

\u201cIt\u2019s an opportunity for the bank to restart.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

So much has changed in the political and economic landscapes of Brazil, Russia, India, China and South Africa since they launched a new bank tasked to support sustainable infrastructure development in 2014. With each BRICS member country hit by some crisis in the past five years, the New Development Bank (NDB) met in Cape Town, […]<\/p>\n","protected":false},"author":50000004,"featured_media":50025554,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[512,544,20000237],"hashtags":[],"country":[50000021,20000110,20000111,50040737,50040754],"class_list":["post-50025543","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-brics","tag-finance","tag-sustainable-development","country-brazil","country-china","country-india","country-russia","country-south-africa"],"acf":[],"yoast_head":"\nNDB slow to deliver on promises | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"At its 4th annual meeting, the so-called BRICS bank remains opaque and is yet to fulfil promise as a motor for \u2018green\u2019 development\" 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