BRICS Development Bank Case Study

India and the BRICS Development Bank

Introduction

The global economy has seen a fundamental change in the last one decade. Emerging and developing countries have significantly increased their role in the global GDP and especially in global economic growth. In fact, emerging countries have been responsible for providing growth to the global economy during the severe financial crisis of 2007-08. However, the rise of emerging economies has never been taken seriously by developed countries in newly evolving the global financial architecture. In other words, developed countries have failed to consider the role of emerging economies like– Brazil, Russia, India, China and South Africa (BRICS) in the global economy. Even the top multilateral financial

However, the NDB has not cleared its stance on the civil society participation, criteria for project selection, transparency or complaint mechanisms. This refers to a similar kind of mistakes which was done by northern-dominated development finance institutions, which only focused on profit oriented projects at the at the expense of promoting sustainable and equitable

These matters when India‘s relations with these powers were in lukewarm. It is interesting to note that India along with other regional power such as China are acquiring economic weight in these international financial institutions, India is interestingly developing strong strategic relationship with Japan and United States, in particular. Now, it seems these institutions will be less detrimental to India’s economic interest. This also gives a reflection that India’s strategic thinking about these international financial institutions has not shifted from a “borrower” mind set to an owner”. This appears from the on-going discussion with regard to India’s eligibility for IDA assistance illustrates the confusion. In 2012, the operations threshold limit for IDA eligibility was GNI per capita of $1165 in real 2009 dollars and India’s GNI per capita of $1170 in 2009. In general, it believed that the countries cannot graduate after crossing income based threshold- there is usually five year of gap between exceeding the threshold and cessation of IDA lending. In the context, it is interesting to note that in 2011, India has agreed to “graduate” from IDA as per policy. However, it subsequently reversed its stand and sought to remain IDA recipient country. Arguing on