The Way Forward for the BRICS New Development Bank

This research paper analyzes the proposed New Development Bank (NDB) led by the BRICS nations, examining its potential funding models, spending priorities, and currency choices. The author argues that a democratic governance structure with equal contributions is the most viable path to ensure the bank's legitimacy and facilitate the entry of other emerging economies.

• The NDB is likely to adopt a democratic governance structure with an initial capitalization of USD$ 50 billion, consisting of equal contributions of USD$ 10 billion from each of the five BRICS countries. This model is preferred over China's proposal for a USD$ 100 billion fund with unequal contributions, as it avoids the disproportionate influence of wealthy nations seen in the World Bank and IMF and simplifies the process for other developing countries, such as Turkey or Indonesia, to join.
• While the NDB's primary focus will likely be infrastructure development, there is potential for spending to extend into sustainable development and green energy. The author suggests that focusing on micro, small, and medium enterprise (MSME) development, similar to the approach of Brazil's BNDES, would be a reasonable focus for the member countries.
• There is a strategic tension regarding whether the NDB should invest domestically within BRICS nations or in other less developed states in Africa, Latin America, and East Asia. The author argues that investing in these external regions may offer higher returns and less competition than domestic projects, while also generating international goodwill.
• The choice of transaction currency remains a point of contention, specifically regarding China's ambition for the Yuan Renminbi to become a global reserve currency. However, the author contends that using a recognized global standard is currently the safer option, as the transition to a BRICS currency or the Yuan as a reserve currency is a slow process.

APA

South African Institute of International Affairs (2014). The Way Forward for the BRICS New Development Bank. https://saiia.org.za/research/the-way-forward-for-the-brics-new-development-bank/

Chicago

South African Institute of International Affairs. The Way Forward for the BRICS New Development Bank. 2014. https://saiia.org.za/research/the-way-forward-for-the-brics-new-development-bank/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=The Way Forward for the BRICS New Development Bank |date=18 March 2014 |url=https://saiia.org.za/research/the-way-forward-for-the-brics-new-development-bank/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2014way, author = {{South African Institute of International Affairs}}, title = {{The Way Forward for the BRICS New Development Bank}}, institution = {South African Institute of International Affairs}, year = {2014}, month = mar, url = {https://saiia.org.za/research/the-way-forward-for-the-brics-new-development-bank/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }