BRICS

Why in news?

• Recently it was announced that Iran and Argentina had applied to join the BRICS.

About BRICS:

• BRICS is an acronym for the informal grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
• The BRICS mechanism aims to promote peace, security, development and cooperation towards establishing a fair and equitable world.
• BRICS accounts for 41% of the world’s population, 30% of the land area, 24% of global GDP and 16% of international trade.
• It has its headquarters at the BRICS tower in Shanghai, China.

About New Development Bank:

• The New Development Bank (NDB) is a multilateral development bank (MDB) established by Brazil, Russia, India, China and South Africa (BRICS)
• It was established in 2014, at the 6th BRICS Summit at Fortaleza, Brazil.
• The prime objective of NDB is financing infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
• According to the Agreement on the NDB, "Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments."
• NDB’s work complements the efforts of multilateral and regional financial institutions, toward global growth and development.
• The initial authorized capital of the bank is USD 100 billion divided into 1 million shares.
• The initial subscribed capital of the bank was equally distributed among the founding members.
• It is headquartered in Shanghai, China.

Voting:

• Unlike the World Bank and IMF, which assign votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and none of the countries will have veto power.

Add on:

• In 2018, the NDB received observer status in the United Nations General Assembly, establishing a firm basis for active and fruitful cooperation with the UN.
• Bank’s Articles of Agreement specify that all members of the United Nations could be members of the bank, however the share of the BRICS nations can never be less than 55% of voting power.

PRACTICE QUESTION:

Consider the following statements regarding ‘New Development Bank’:

1. It has observer status in the United Nations General Assembly

2. Each participant country has one vote

3. It is formed under ASEAN

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 2 and 3 only

(d) 1,2 and 3

                       A

">Answer