The BRICS New Development Bank (NDB) has just begun its operation on infrastructure financing. While long-term speculation on its activities in the uncertain context is hazardously conjectural, it is possible to discuss its short-term implications. If the egalitarian principle – with an equal capital contribution among the BRICS members – should be firmly upheld, the growth of its financing will be determined by its weakest member (South Africa) and by new members (particularly non-borrowers). The former case will hinder the NDB from becoming a major institution and the latter case will dilute the founders’ pivotal position in the institutoin. If China, the only founding member with financial clout, should be allowed to raise its own capital base, the NDB’s financial capacity will be augmented, but its institutionalized egalitarianism will be compromised. Moreover, if intra-BRICS talks on the capital base and new membership should reveal serious acrimony, they will not only dampen global support but also discourage others to join the NDB. The paucity of creditworthy track record will also oblige the NDB to co-finance with other institutions, which, in turn, will prevent it from lending in a radically different fashion from the conventional practices. If the NDB should appear to fail bringing about major changes in the global financial architecture, many observers will question the merits of reinventing the wheel. Even worse, the NDB will be seen as a smokescreen to hide the exploitation of Southern countries at the best advantage of the BRICS members. At any rate, it is likely that the NDB will expand its operation, but its growth path will be slow and unsteady. At least, in the foreseeable future its effects will not be as significant as many observers have hoped.

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Conference The 4th International Conference of BICAS, November 28‐30, 2016. China Agricultural University, Beijing
Kasahara, S. (2016). BRICS New Development Bank: Its Birth & Major Implications to International Political Economy. Presented at the The 4th International Conference of BICAS, November 28‐30, 2016. China Agricultural University, Beijing. Retrieved from