Wednesday, June 3, 2015

Asian Infrastructure Investment Bank AIIB) and BRICS-led New Development Bank (NDB)

Do you think post the creation of China led Asian  Infrastructure Investment Bank AIIB), the BRICS-led New Development Bank (NDB) has become irrelevant? Critically analyse.


New development bank as the name suggest is having a different and new approach towards development of members as well as non member countries.
It works on two principles
1)sharing of knowledge, experience, platform to speak for the benefit of economically backward and developing nations and
2)of course development finance along with offering alternative ways to finance development.
NDB came into existence due to the problems within the existing institutions like WORLD BANK and IMF. These two institutes need reform within their ranks and approach so that they may not remain oligopoly of western developed countries.
China too has problems with these two institution so it came with its own institution named AIIB.
difference between AIIB and NDB
1) AIIB focuses only on infrastructure finance while NDB will also act as a platform for developing and weaker countries to represent their grievance at the global level.
2) AIIB is an ASIA centric institution while NDB is having a global character. NDB will also give finance and support to non member countries.
3) AIIB has broader base than NDB while in terms of services provided by these banks NDB has larger base.
4) AIIB is a finance based institution while NDB is a ideas sharing finance institution which makes it more attractive.
There is only one problem that NDB can face due to AIIB is that AIIB has a very large resource base and also its establishment is going at a much faster pace than NDB.
NDB to harness all these advantages over AIIB, needs to fast track its establishment process and start working as soon as possible. NDB can prove to be a boon for developing and backward economies as they will be getting the proper solution for their problems because of the structure and diverse human resource base at its administrative level. All these things prove that AIIB's establishment will not reduce the importance of NDB.

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