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Context:

Algeria officially joins the New Development Bank (NDB), a financial institution created by the BRICS countries.

BRICS

BRICS is an intergovernmental organization comprising 10 countries: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the United Arab Emirates, and Indonesia.

Originally formed in 2009 as BRIC (Brazil, Russia, India, China), the organization has evolved into a significant economic and political bloc representing emerging economies and challenging the traditional Western-dominated global order.

Timeline

2001 =>  Goldman Sachs economist Jim O'Neill coins the term "BRIC" to describe the four emerging economies with high growth potential.

2006 => First informal meeting of BRIC foreign ministers on the margins of the UN General Assembly.

2009 => First formal BRIC summit held in Yekaterinburg, Russia, marking the official formation of the group.

2010 =>  South Africa invited to join, transforming BRIC into BRICS.

2014 => BRICS New Development Bank (NDB) established with initial capital of $50 billion.

2015 => New Development Bank begins operations, headquartered in Shanghai.

2024 => Expansion with five new members: Egypt, Ethiopia, Iran, UAE, and initially Saudi Arabia (which later declined).

January 2025 => Indonesia formally become the first Southeast Asian nation to join the bloc. 

New Development Bank (NDB)

It is a multilateral development bank established by the BRICS nations (Brazil, Russia, India, China, and South Africa) in 2014.

Operating since 2015, the NDB serves as an alternative to traditional Western-dominated financial institutions like the World Bank and International Monetary Fund.

The bank focuses on financing infrastructure and sustainable development projects in emerging economies.

Development

2014 => Fortaleza Declaration: BRICS leaders signed the agreement establishing the New Development Bank during the 6th BRICS Summit in Fortaleza, Brazil. The bank was conceived as an alternative to existing multilateral financial institutions.

2015 => Bank Becomes Operational: The NDB officially commenced operations with the appointment of its first President, K.V. Kamath from India, and established its headquarters in Shanghai, China.

2016 => First Loans Approved: The bank approved its first set of loans totaling $811 million for renewable energy projects in Brazil, China, India, and South Africa.

2021 => Expansion Phase: NDB welcomed its first new members - Bangladesh, UAE, Uruguay, and Egypt, expanding beyond the original BRICS nations.

2023-2024 => Recent Developments: Continued expansion with new member applications and increased focus on climate finance and sustainable development goals.

Governance Framework

• Board of Governors: The highest decision-making body, consisting of finance ministers or equivalent officials from member countries.
• Board of Directors: Responsible for day-to-day operations, with each founding member having equal voting rights (20% each).
• President: Rotates among member countries every five years, currently held by Dilma Rousseff (Brazil).

Objectives

The NDB was established with the fundamental mission to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies. The bank aims to complement existing multilateral and regional financial institutions in addressing the infrastructure gap in developing countries.

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Source: 

HINDUSTAN TIMES