The Development Bank of Brics

• Author: Thiago Ferreira Almeida - Roberto Luiz Silva
• Position: Municipality of Belo Horizonte, Health Sector (Belo Horizonte, Brazil) - Federal University of Minas Gerais (Belo Horizonte, Brazil)
• Pages: 5-32

BRICS LAW JOURNAL Volume V (2018) Issue 4

ARTICLES

THE DEVELoPMEnT BanK oF BRICS

THIAGO FERREIRA ALMEIDA,

Municipality of Belo Horizonte, Health Sector (Belo Horizonte, Brazil)

ROBERTO LUIZ SILVA,

Federal University of Minas Gerais (Belo Horizonte, Brazil)

DOI: 10.21684/2412-2343-2018-5-4-5-32

This paper takes aim at the international nancial system through the lens of the New

Development Bank of the BRICS countries with an analysis of the Bank’s impact and

relevance vis-à-vis the system. The work compares the traditional characteristics of

international development institutions such as the World Bank and nancial entities

directed by national authorities with international solutions such as the New Develop-

ment Bank, whose goals are to boost the infrastructure and renewable energy sectors

of its ve member countries as well as those of other developing countries. The work

lays out insightful data on foreign direct investment of BRICS, GDP growth analyses,

imports and exports inside and outside the BRICS group for a clearer understanding of

the companies and businesses involved in the group. The work highlights an outlook

of investment and development engaged in this new form of South-South cooperation

which has been created by BRICS.

Keywords: BRICS; New Development Bank; investment; development; international

organizations; World Bank.

Recommended citation: Thiago Ferreira Almeida & Roberto Luiz Silva, The Develop-

ment Bank of BRICS, 5(4) BRICS Law Journal 5–32 (2018).

BRICS LAW JOURNAL Volume V (2018) Issue 4 6

Table of Contents

Introduction

1. BRICS Overview

2. The Investment Scenario Among the BRICS Countries

3. Doing Business in BRICS

4. ICSID and BRICS

5. Brazil-China Bilateral Investments

6. Development Banks in the BRICS Countries

7. The New Development Bank of the BRICS Countries

Conclusion

Introduction

The nancial crisis of 2008 (the so-called “subprime mortgage crisis”) struck

the nancial core of the United States, leading many institutions such as Leman

Brothers to bankruptcy. The emerging markets were decisive in tackling the crisis and

sustaining the U.S. institutions with a considerable amount of nancial resources.

Brazil, Russia, India and China were key countries in putting the international

nancial system back onto the right path. Those countries form the BRIC, an acronym

created by Jim O’Neill of Goldman Sachs in 2001, who armed that the four countries

of this group would be the next strong world economies within a few decades. In 2009,

the BRIC countries formally met in Yekaterinburg, Russia, launching a new platform for

cooperation in international aairs composed only of emerging countries. The newly

formed group demanded reforms in the international organizations, especially the

Bretton Woods institutions, the International Monetary Fund (IMF) and the World Bank

Group, in order to equate international political power to global economic realities.

In 2010, in Sanya, China, BRIC became BRICS with the addition of South Africa

to the group. This move symbolized the act of welcoming an African country to

represent the new approach of South-South relations.

In 2014, in Fortaleza, Brazil, BRICS declared the creation of the New Development

Bank (NDB) and the Contingency Reserve Arrangement (CRA), which brought new

entities to the international nancial system. These acts reinforced the BRICS’s plea

to the international nancial institutions for the need of wider representation of

emerging markets. Furthermore, the BRICS agenda showed that they were prepared

to join not only international economic forums, but also political ones.

The events of the rst decade of the 21st century relate to the new changes and

arrangements facing the world, mainly as new countries from the economic South

are leading the world in growth and bringing development to more people. Stuenkel1

1 Oliver Stuenkel, The BRICS and the Future of Global Order (Lanham: Lexington Books, 2015).