in BRICS and other emerging economies and developing countries, complementing the efforts of multilateral and regional financial institutions toward global growth and development”.10 The professed main objectives of NDB operations are four-fold: (a) fostering development of member countries; (b) supporting economic growth; (c) promoting competitiveness and facilitating job creation; and (d) building a knowledge-sharing platform among developing countries. In 2016–2017, the NDB approved loans involving financial assistance of over US $3.4 billion for projects in the areas of green and renewable energy, transportation, water sanitation, irrigation, and other areas. In particular, as per the NDB’s General Strategy Document, sustainable infrastructure development is at the core of NDB’s operational strategy of 2017–2021, and it is going to dedicate about two-thirds of its financing commitment to this area.
Figure 5:Foreign exchange reserves of BRICS countries (USD billion).
Source: World Bank.
Has the NDB been effective in its operations? One may note its sharp contrast to the Asian Infrastructure Investment Bank (AIIB). With its headquarter in Beijing, the AIIB commenced operations in January 2016 and has now grown to more than 50 approved members from around the world. Has the NDB got the attention it deserved? It has been aptly noted:
“The launch of the NDB has been over-shadowed by the China-backed Asian Infrastructure Investment Bank (AIIB). While the AIIB is consistent with a model of structural-driven change in global politics, the NDB necessitates a more nuanced analysis around collective agency. With 26.06 per cent of voting rights and a 30.34 per cent … stake of the US$100 billion capital base …, China possesses a de facto veto in the AIIB. In sharp contrast the initial subscribed capital of US$50 billion in the NDB is equally shared among its five members … While the NDB has so far restrained from expanding beyond the BRICS, the AIIB opened up to 57 founding members thereby driving a wedge between those countries willing to follow Beijing’s lead and those (notably the United States and Japan) resistant in doing so. Although the extent of the global reach of the NDB is still very much in doubt, the AIIB is tied more explicitly to the ‘One Belt One Road’ (OBOR) … designed to advance infrastructural development both on the westward land route from China through Central Asia and on the southerly maritime routes from China through Southeast Asia and to South Asia, Africa, and Europe” (Cooper, 2017: 275).
Thus, it appears that the spirit of multilateralism in the NDB could have been a laggard in comparison with the AIIB that has been dictated by Chinese interest.
Concluding Observations
Having described the genesis and establishment of the BRICS block, this chapter has tried to gauge different elements of heterogeneity. Such heterogeneity exists in terms of different matrices, such as size of the economy, operation and state of monetary and fiscal policies, exchange rate flexibility, and quantum of foreign exchange reserves. The presence of such heterogeneity is accentuated by the presence of China whose size tends to overshadow all other economies in the block. Perhaps the effective emergence of the BRICS block purely in terms of economic multilateralism without any binding force of history, politics, or shared identity is difficult.11 On the contrary, the presence of complex political issues among the three major partners of the block (viz., China, Russia, and India) could have made the BRICS block suffer from blue baby syndrome, thus bringing into question its healthy existence (if not the longevity).
References
Baracuhy, B. (2012). “The Geopolitics of Multilaterism: The WTO Doha Round Deadlock, the BRICs, and the Challenges of Institutionalised Power Transitions”, CRP Working Paper, University of Cambridge.
Bernanke, B. S. (2006). “The Chinese Economy: Progress and Challenges”, Speech at the Chinese Academy of Social Sciences, Beijing, China, December 15, 200, available at https://www.federalreserve.gov/newsevents/speech/bernanke20061215a.htm (accessed during January–March 2017).
Cooper, A. F. (2017). “The BRICS’ New Development Bank: Shifting from Material Leverage to Innovative Capacity”, Global Policy, 8(3): 275–284.
Exim Bank (2016). “Intra-BRICS Trade: An Indian Perspective”, Working Paper No. 56.
Garcia, M., D. Guillen and P. Kehoe (2019). “The Monetary and Fiscal History of Brazil, 1960–2016”, IDB Working Paper No. IDB-WP-990, available at https://publications.iadb.org/publications/english/document/The_Monetary_and_Fiscal_History_of_Brazil_1960-2016_en_en.pdf.
Glosny, M. A. (2010). “China and the BRICs: A Real (but Limited) Partnership in a Unipolar World”, Polity, 42(1): 100–129.
Goldman Sachs (2001). “Building Better Global Economic BRICs”, Global Economics Paper No. 66.
Goldman Sachs (2003). “Dreaming With BRICs: The Path to 2050”, Global Economics Paper No. 99.
Goldman Sachs (2007). BRICs and Beyond, New York: Goldman Sachs Global Economics.
Government of India (Ministry of External Affairs) (2016). “India and the BRICS”, available at https://www.mea.gov.in/Portal/ForeignRelation/BRICS_02_may_2016.pdf (accessed during January–March 2017).
Government of India (Ministry of Finance) (2012). The BRICS Report, Delhi: Oxford University Press.
Hindustan Times (2016). “India’s boycott of Chinese goods akin to jingoism- a senior Chinese official has said”, Nov 02, 2016, available at https://www.hindustantimes.com/world-news/india-s-boycott-of-chinese-goods-akin-to-jingoism/story-RKHO4ls9hggRfkmq7YNLrO.html (accessed during January–March 2017).
IMF (2016). Annual Report on Exchange Arrangements and Exchange Restrictions, Washington DC: IMF.
IMF (2017). India: Selected Issues, IMF Country Report No. 17/55, available at https://www.imf.org/~/media/Files/Publications/CR/2017/cr1755.ashx (accessed during January–March 2017).
Khundrakpam, J. (2012). “Coordination Among BRICS Central Banks for Monetary Policy-Why the Need But Why So Difficult?”, Presentation at the Meeting of BRICS Economics Research Group in National Institute of Public Finance and Policy, New Delhi on February 27.
Korhonen, I. and R. Nuutilainen (2017). “Breaking monetary policy rules in Russia”, Russian Journal of Economics, 3: 366–378.
Lieber, R. J. (2014). “The Rise of the BRICS and American Primacy”, International Politics, 51(2): 137–154.
Lindsay, M. J. and R. Van Rossem (2014). “The BRIC Phantom: A comparative analysis of the BRICs as a category of rising powers”, Journal of Policy Modeling, 36S: S47–S66.
Luckhurst, J. (2013). “Building Cooperation between the BRICS and Leading Industrialized States”, Latin American Policy, 4(2): 251–268.
Mathai, K., G. Gottlieb, G. H. Hong, S. E. Jung, J. Schmittmann, and J. Yu (2016).
