Topic: Important International institutions, agencies and fora- their structure, mandate.
3. What is the mandate of New Development Bank and Asian Infrastructure Investment Bank? Examine whether the coming of NDB and AIIB changes the rules of development financing vis-à-vis the western dominated multilateral financing institutions? (250 words)
Why this question:
The China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank (NDB), the latter jointly run by Brazil, Russia, India, China and South Africa, were partly born out of frustration with the decision-making structure at big lenders such as the World Bank and the International Monetary Fund, where some developing countries don’t enjoy voting rights that reflect their contribution to the global economy.
Key demand of the question:
The question wants us to talk about the mandates of the two financing agencies – NDB and AIIB. Further go on to discuss how the two institutions differ from the existing multilateral institutions. Provide any examples where they have helped out nations.
Examine – When asked to ‘Examine’, we have to look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.
Structure of the answer:
write a few introductory lines about NDB and AIIB.
Mandates of NDB and AIIB.
- The NDB has been envisaged as a “dedicated channel of alternate finance” with greater focus on emerging economies and the Global South.
- The core mandate of the AIIB is to address Asia-Pacific’s acute infrastructural needs. Its mission is “to improve economic and social development in Asia by investing in high-quality, financially viable and eco-friendly infrastructure projects”. It also aims to mobilize private capital to co-finance projects.
Difference between NDB and AIIB and existing multilateral finance institutions.
- Here you can talk about the reasons for formation, shareholding, voting rights, conditionalities etc.
Mention about any Examples where the AIIB, NDB have taken up the lead if any.
Finally, give an opinion about how AIIB and NDB are changing the dynamics of financing.
based on your discussion, form a fair and a balanced conclusion on the given issue.