The rise of BRICS development finance institutions: A comprehensive look into the New Development Bank and the Contingency Reserve Arrangement
AbstractAt the fifth BRICS summit in 2013, the BRICS countries (Brazil-Russia-India-China-South Africa) agreed to form new multi-lateral development financial institutions such as the New Development Bank and the Contingent Reserve Arrangement. These new institutions are intended to perform similar roles to that of previously established international development institutions, particularly the World Bank and the International Monetary Fund while avoiding their biases towards lending to de-veloping nations. This paper examines the role that these institutions play in chang-ing the international financial architecture of development finance, particularly infra-structure development in the BRICS countries for the purposes of stimulating further trade and investment opportunities. It argues that the New Development Bank and Contingent Reserve Arrangement faces many challenges, such as issues of govern-ance structures and decision making procedures which require integrity, transparen-cy and political immunity in making lending decisions. It will also examine the role of China as a key partner and major source of capital in these development projects and, as well as its interests in strengthening its political and economic ties with other developing countries.
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