Strategies of NDB/New Development Bank: Overview

Strategies of NDB/New Development Bank: Overview

Q.3: At the annual summit in Russia to be held lately, BRICS leaders will announce the formation of the world’s newest multilateral development bank-the NDB/New Development Bank. Discuss the strategies that should be followed by NDB to attain success over and above the World Bank.

- New Development Bank should focus on eradication of poverty, unemployment and net carbon emissions

- The bank which will have USD 100 billion as initial capital will fund infrastructure and sustainable development projects in BRIC nations and elsewhere

- The NDB should aim to be different from the WB which finances unidimensional projects in same countries, using same techniques, tools and methods

- NDB should be based on new objectives and fresh strategies rather than falling into the same track as WB

- The three internationally relevant goals which the NDB should be achieved by 2050 are zero poverty, zero net carbon missions and zero unemployment

- These goals can be attained using the following basic strategies.

- Firstly, the creative power and commitment of the fresh generation of youth should be unleashed to attain the goals

- Secondly, focus should be on technological innovations for solving human problems. Combining the power of youth with technology will prove unbeatable

- The third strategy involves building social businesses for mobilising longstanding, critical social, economic and environmental problems ; social business is not associated with the profit motive but is rather mission driven, whereby non dividend companies are devoted solely to solution of human problems

- Social businesses are also sustainable, replicable, efficient and transferable

- Social business model can be replicated across various settings

- NDB could create a new window for financing and promoting social businesses and encourage conventional business to undertake social businesses alongside main business activities

- NDB could also contribute to country level social business funds as JVs with local partners to create provincial level social business funds where local investors form a major equity and it holds a minor equity

- NDB will undertake many different types of infrastructure projects and ownership by social businesses will help far beyond either government or commercial ownership

- Human rights and good governance should form the core of NDB’s operations and right objectives as well as strategies for their implementation are needed

Facts and Stats

- NDB was earlier known as the BRICS Development Bank

- It is an alternative to World Bank and IMF set to influence and establish base in 5 emerging markets

- The top 4 BRIC countries in 2014 accounted for more than 3 billion of the population, or 41.4% of the population

- Brazil, Russia, India and China also cover more than a quarter of the world’s area spanning 3 continents

- These 4 BRIC nations accounted for 25% of the world’s GDP in 2014