New Development Bank (NDB)

Pakistan has approached China, which it regards as an "iron friend," to assist in securing a membership for Pakistan in the New Development Bank (NDB).

About New Development Bank (NDB)

The New Development Bank (formerly known as the BRICS Development Bank) is a multilateral development bank founded by the BRICS countries—Brazil, Russia, India, China, and South Africa.

• Establishment and Founding Members:
  The NDB was established in 2014 after an agreement was signed during the BRICS Summit in Fortaleza, Brazil. The Bank officially started operations on July 21, 2015, and is headquartered in Shanghai, China. The founding members of the bank are Brazil, Russia, India, China, and South Africa.

• Objective:
  The NDB was created with the primary objective of mobilizing resources for financing infrastructure projects and sustainable development initiatives, especially in BRICS countries and other emerging economies. It aims to support the development needs of countries in Asia, Africa, and Latin America.

• Key Areas of Operation:
  The NDB focuses on the following sectors:

  • Clean energy and energy efficiency

  • Transport infrastructure

  • Water and sanitation

  • Environmental protection

  • Social infrastructure

  • Digital infrastructure

• Capital and Financial Structure:

  • The NDB has an initial authorized capital of USD 100 billion and an initial subscribed capital of USD 50 billion, which was equally distributed among the five founding members.

  • Unlike institutions like the World Bank or Asian Development Bank (ADB), the NDB operates on the principle of equal voting power for all its member states. This structure reflects the equal status of each member in decision-making processes.

Membership and Governance

• Membership:
  Membership in the NDB is open to any member state of the United Nations. This inclusivity has allowed countries outside the BRICS bloc to become members of the bank, further expanding its global reach.

• Governance Structure:
  The NDB is governed by a Board of Governors, which comprises the finance ministers of the five founding BRICS countries. In addition, the bank has a Board of Directors that oversees its daily operations and strategic direction.

  The presidency and vice-presidency of the NDB rotate among the BRICS founding members, ensuring shared leadership and representation for the group as a whole.

Pakistan’s Interest in Joining the NDB

Pakistan's interest in joining the NDB is primarily driven by the potential benefits of accessing funding for its development needs, especially in the areas of infrastructure, energy, and environmental projects. The fact that China, a key NDB member and Pakistan's close ally, has been approached for assistance in facilitating Pakistan’s membership reflects the geopolitical dynamics at play.

By joining the NDB, Pakistan would gain access to:

• Financial support for infrastructure projects: This includes investment in roads, railways, and energy, which are critical for Pakistan's economic growth.

• Sustainable development funding: Pakistan, like many emerging economies, faces challenges in financing clean energy and environmental protection initiatives. Membership would provide access to NDB’s focus on these areas.

• Equal voting rights: Membership would offer Pakistan equal influence in decision-making processes, which can be significant for shaping the NDB's future strategies and projects.

Conclusion

The New Development Bank continues to strengthen its role as a key player in global development, offering financial support and infrastructure investment to emerging economies. With Pakistan’s move to seek membership, the bank's influence is likely to grow, especially as countries like Pakistan explore new avenues for funding their development goals.