The New Development Bank: The first multilateral BRICS Bank has been established to create a tangible instrument for increasing economic cooperation between the BRICS nations while at the same time reflecting the close relations among them. What are the geopolitical implications the New Development Bank may have on the global economic order?

Mauritsen, Martin Hartmann

4. term

Development and International Relations, Master

2015

2015-05-29

49 pages

The creation of the New Development Bank is a result of the frustration that the BRICS nations feel with the existing international institutions in place. Considering their relative positions in geopolitics these days, having the largest economy and population in the world, their representation in the IMF and the World Bank is laughable. The outdated institutions do not recognize their status accordingly and this is manifested in the (lack of) influence that they can exert in a global governance capacity. Establishing their own institution provides them with the power to exert their influence on global affairs. Geopolitical implications of this include shift in power relations, reduction in US and western global economic dominance, and reforms in policies pertaining to global governance. This paper explores all the aspects and considers how it will affect the current global economic order. While it is always speculative to try and predict the future, theoretical works of previous global economic orders, particularly the Bretton Woods system, may give some indication to how the current global economic order will react to the introduction of the New Development Bank. The paper concludes that the New Development Bank will have significant implications on the global economy, however due to the relative newness of the institution, these geopolitical implications may take some time before they manifest themselves.

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