Dear colleagues,
The New Development Bank (NDB) , created last year by the BRICS countries (Brazil, Russia, India, China and South Africa), will begin operations on 7 July, coinciding with the next BRICS Summit to take place in Ufa, Russia on 7-8 July. The information comes from Russian officials. See a news report below.
The NDB will eventually be open to non-Brics members, be headquartered in Shanghai and have an initial capital investment of $100 billion. It will be joined later this year by the new Asian Infrastructure Investment Bank (AIIB), scheduled to be established in Beijing before the end of 2015. The NDB and AIIB have been presented as alternative sources of development finance to the World Bank and long-established regional bodies such as the Asian Development Bank.
The founding of the NDB was announced at the July 2014 BRICS Summit held in Brazil, jointly with the creation of the BRICS Contingent Reserve Arrangement (CRA). The latter has been put forward as providing an alternative to the IMF for financial assistance to countries with temporary balance-of-payment difficulties, but its financial resources are modest compared to those of the Fund.
Additionally, the CRA will only provide its full financial support to countries that comply with an IMF lending programme. Specifically, to be eligible to full assistance the member country seeking support (“Requesting Party”) must meet the following criterion:
“Evidence of the existence of an on-track arrangement between the IMF and the Requesting Party that involves a commitment of the IMF to provide financing to the Requesting Party based on conditionality, and the compliance of the Requesting Party with the terms and conditions of the arrangement.”
(http://brics6.itamaraty.gov.br/media2/press-releases/220-treaty-for-the-establishment-of-a-brics-contingent-reserve-arrangement-fortaleza-july-15)
Peter Bakvis
ITUC/Global Unions – Washington Office
888 16th Street NW
Washington, DC 20006
E-mail: pbakvis@globalunions-us.org
The New Development Bank (NDB) , created last year by the BRICS countries (Brazil, Russia, India, China and South Africa), will begin operations on 7 July, coinciding with the next BRICS Summit to take place in Ufa, Russia on 7-8 July. The information comes from Russian officials. See a news report below.
The NDB will eventually be open to non-Brics members, be headquartered in Shanghai and have an initial capital investment of $100 billion. It will be joined later this year by the new Asian Infrastructure Investment Bank (AIIB), scheduled to be established in Beijing before the end of 2015. The NDB and AIIB have been presented as alternative sources of development finance to the World Bank and long-established regional bodies such as the Asian Development Bank.
The founding of the NDB was announced at the July 2014 BRICS Summit held in Brazil, jointly with the creation of the BRICS Contingent Reserve Arrangement (CRA). The latter has been put forward as providing an alternative to the IMF for financial assistance to countries with temporary balance-of-payment difficulties, but its financial resources are modest compared to those of the Fund.
Additionally, the CRA will only provide its full financial support to countries that comply with an IMF lending programme. Specifically, to be eligible to full assistance the member country seeking support (“Requesting Party”) must meet the following criterion:
“Evidence of the existence of an on-track arrangement between the IMF and the Requesting Party that involves a commitment of the IMF to provide financing to the Requesting Party based on conditionality, and the compliance of the Requesting Party with the terms and conditions of the arrangement.”
(http://brics6.itamaraty.gov.br/media2/press-releases/220-treaty-for-the-establishment-of-a-brics-contingent-reserve-arrangement-fortaleza-july-15)
Peter Bakvis
ITUC/Global Unions – Washington Office
888 16th Street NW
Washington, DC 20006
E-mail: pbakvis@globalunions-us.org
