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New Development Bank of BRICS opens in Shanghai

The Brazil-Russia-India-China-South Africa (BRICS) grouping has formally opened the New Development Bank (NDB) as a dedicated channel of alternate finance, which will focus on emerging economies and the Global South.

Top officials of the new bank, which opened on Tuesday in Shanghai, stressed that the NDB would not rival but complement the western backed International Monetary Fund (IMF) and the World Bank, born out of the Bretton Woods Conference of the forties. However, the emergence of the NDB and the Asian Infrastructure Investment Bank (AIIB) — a China-led initiative to fund infrastructure in Asia — was hastened by the reluctance by the West, especially the United States, since 2010, to grant emerging economies a greater say within the IMF.

The IMF reforms “would have shifted more power to developing and emerging market economies; however, these reforms have since stalled as a result of the US Congress’ failure to ratify the implementing legislation domestically,” notes an article in the Geneva-based International Centre for Trade and Sustainable Development.

Rejecting the possibility of a rivalry between the two newly established banks, NDB’s first President Kundapur Vaman Kamath stressed that after a meeting in Beijing with the AIIB, the NDB had decided to establish a “hotline” with the AIIB to forge closer ties between “new institutions coming together with a completely different approach”.

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