The NDB at a glance:<\/p>\n
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- Established in 2014<\/li>\n
- Approved first loans in 2016<\/li>\n
- Has now approved 42 loans in 5 Brics countries<\/li>\n
- 16 are for projects the NDB classifies as 'clean energy'<\/li>\n
- A portfolio of US$12 billion<\/li>\n
- But just US$1 billion disbursed to date<\/li>\n
- Elects new chief in 2020<\/li>\n<\/ul>\n
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The NDB is the Brics bank, born of the group of so-called \u2018emerging\u2019 economies \u2014 Brazil, Russia, India and China, and later South Africa \u2014 that this week celebrates its 10th anniversary in Bras\u00edlia<\/a>.<\/p>\n
The NDB was to be by and for the developing world. The bank would excel at innovation and transparency like no other. It pledged to favour sustainable projects above any others.<\/p>\n
Yet, so far the only members are its founders; observers find its criteria for choosing investments vague<\/a>; and even controversial Amazon road paving can get the NDB\u2019s \u2018sustainable\u2019 stamp<\/a>.<\/p>\n
More to the point, few people even really know of the ND \u2013 so what happened?<\/p>\n
Why was the NDB created?<\/h2>\n
The NDB was initially India\u2019s idea, which it shared with other Brics members in 2012. After two years of negotiations, the bank was created at the 2014 Brics summit in Fortaleza, Brazil.<\/p>\n
By that time, the Brics had become much more than a group of countries with a convenient and catchy acronym.<\/p>\n
Brics was the most important group of developing nations in the world because it involved five massive emerging countries with some of the world’s largest populations, land masses and economies.<\/p>\n
Although it\u2019s questionable whether South Africa falls into these categories, it is one of Africa\u2019s biggest economies.<\/p>\n
The bank aimed to solve developing nations need for money to build infrastructure and develop their economies at a time when there was not enough credit around, according to Paulo Nogueira Batista Jr., the first Brazilian director of the NDB.<\/p>\n
As Nogueira wrote in his book Brazil doesn\u2019t fit in anyone\u2019s backyard<\/em><\/a>, the idea of the NDB was bold: to create a development bank that would challenge the global development finance architecture that developed countries created in the aftermath of the Second World War, known as the Bretton Woods system<\/a>.<\/p>\n
Crucially, it would also learn from all the mistakes they made.<\/p>\n
![\"New](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/11\/Screenshot-2019-11-11-at-11.29.47.png\")
Read our special report from 2017: New perspectives on the new Brics bank<\/a><\/em><\/figcaption><\/figure>\n \u201cWe decided to pave our own way. We would never have done this if these institutions were more malleable,\u201d Nogueira told Di\u00e1logo Chino<\/em>, in reference to the Bretton Woods.<\/p>\n
Brics launched the bank a few years after openly expressing their discontent <\/a>with the IMF\u2019s choice of yet another European leader in Chrstine Lagarde. As they launched the NDB in 2014, the Brics were clear in criticising the IMF for not implementing reform that would give developing nations more decision-making power.<\/p>\n
\u201cWe remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund reforms, which negatively impacts the IMF\u2019s legitimacy, credibility and effectiveness,\u201d their statement <\/a>said.<\/p>\n
Developed countries were welcome to join the NDB, but they couldn\u2019t borrow from it or having voting powers that exceeded 20%.<\/p>\n
Back in 2014, these ideas were very powerful and some more radical observers thought the NDB could challenge<\/a> the World Bank\u2019s power, and even the hegemony<\/a> of the US dollar.<\/p>\n
What has the NDB achieved?<\/h2>\n
First of all, the fact that the NDB exists is no small feat for a group of nations that are very different and geographically distant. Dozens of nations want to become members of the bank \u2014 although none have yet joined.<\/p>\n
\u201cAs a development bank, its impact isn\u2019t trivial,\u201d said Paulo Esteves, director of the Brics Policy Center<\/a>. \u201cWe are talking about financing to countries that didn\u2019t have credit lines until then, and this bottleneck has been solved, by this and other banks.\u201d<\/p>\n
The NDB has also managed to innovate in some areas, such as lending in local currencies to protect borrowing countries<\/a> from a stronger dollar, which was one of its founding features.<\/p>\n
The problem with people who think the NDB is a failure is that maybe they expected too much<\/p><\/blockquote>\n
Another innovation is that the bank accepts parametres for compliance<\/a> with environmental and social standards designed by borrowers, respecting its members\u2019 own policies.<\/p>\n
\u201cThis impact is important, for better or worse,\u201d said Esteves, explaining that while this means resources are easier to access, it can also mean that the social and environmental standards in projects the NDB supports can be very low.<\/p>\n
The bank has successfully installed its first regional centre in South Africa, and should open another in S\u00e3o Paulo by the end of the year. It has established partnerships with important development banks, such as Latin American regional development bank CAF, the China-led Asian Infrastructure Investment Bank<\/a>, and the World Bank group.<\/p>\n
The NDB\u2019s credit rating is AA+, one short of the maximum, which other development banks such as AIIB have. This is despite many of its members, notably Brazil and South Africa, facing tough economic times domestically.<\/p>\n
The bank has successfully emitted a number of bonds \u2014 including \u2018green bonds<\/a>\u2019 in 2016 \u2014\u00a0 and has now approved 42 projects in member countries for a total of over US$12 billion<\/a>, more than the AIIB\u2019s roughly $8 billion portfolio<\/a>.<\/p>\n
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