The First Annual Meeting of the Board of Governors of the BRICS New Development Bank was held at Shanghai, China.
The New Development Bank (NDB) has completed one year since its establishment in 2015. Since its establishment, the policies of operations have been put in place, projects for all five member countries have been approved and the Bank has completed an issuance of Green Bonds. During the meeting of the Board of Governors of the NDB, it was decided that India will be the Chair of the Board of Governors of the Bank and the second Annual meetings of NDB will be held in India in 2017.
Mr Raj Kumar, Joint Secretary, Department of Economic Affairs, Government of India represented the Finance Minister of India and delivered the Governor’s Statement on his behalf. The Governor’s Statement read by Mr. Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance is given below:
“At the outset, we thank the Government of People’s Republic of China for their wonderful hospitality and excellent arrangements for hosting us on this historic milestone of the New Development Bank.
The first Annual Meeting of the NDB is a landmark in the advancement of the vision of the establishment of the Bank. It embodies the considerable progress and achievements of the past one year in setting up and operationalisation of the Bank. During the year, policies have been put in place and approvals have been given for financing renewable energy projects. We congratulate President Kamath and the management team for steering the Bank with speed, skill and strategy.
The first Annual Meeting also marks the commencement of the phase of immense work for realization of NDB’s vision of providing catalytic resources for sustainable infrastructure to the founder members and other emerging and developing economies.
The challenges that lie before us are significant. The current global economic context is far from being robust and is marked by a modest pickup in some advanced economies from their low levels of growth; decline in growth in emerging market and developing economies; increased financial sector volatility; and, in general, a downward revision of global growth projections by the International Monetary Fund. BREXIT has further heightened uncertainty, market volatility and risk-averse behavior.
The structural problems of Emerging Markets and Developing Economies (EMDEs) continue to affect their growth. The sluggish global trade and low commodity prices have also adversely affected commodity-exporting EMDEs, by aggravating their corporate and other economic vulnerabilities.
Governments, Central Banks and regulators have to mitigate the pressure of such vulnerabilities through judicious mix of fiscal, monetary and structural policies. We, in India, are following the approach of ‘Reform to Transform’ through far reaching Structural Reforms. We have taken several initiatives to boost investment climate and improve the ease of doing business. National Infrastructure Investment Fund has been set-up to stimulate investment in Infrastructure. Likewise, Insolvency and Bankruptcy code 2016 has been passed by the Parliament to deal with insolvency of corporate, individuals, partnerships and other entities. Initiatives such as Make in India, Start-up India, and Skill India are focused at encouraging innovations, entrepreneurship and job creation. Our government has launched a massive financial inclusion programme. More than 200 million bank accounts have been opened for the unbanked persons. We are now using Aadhaar, a unique identification system with statutory backing, as backbone for targeted delivery of financial and other subsidies, benefits and service.
In such a scenario, investments in sustainable infrastructure play a catalytic role in anchoring a more resilient recovery, improving potential growth and fostering inclusive growth in the countries. This is also the niche area of focus of the New Development Bank.
True to its nomenclature, the ‘New’ Development Bank has to focus on financing demonstrable projects with innovative approaches and instruments for speedy creation of infrastructure. We urge that this focus should be on:
o Energy generation projects, both renewable and non renewable energy projects, which utilize cost effective and clean technologies;
o Transport projects, which have a significant impact on reduction in regional and spatial inequalities and promote inclusive growth; and,
o Urban sector infrastructure projects, which enhance the livelihood potential and improve the quality of life of the people.
While commencing operations in earnest, the NDB must draw upon its core strengths and uniqueness. As a top-class financial institution, it must develop a strong pipeline of projects and respond in a fast and flexible manner to further the aspirations and interests of its members.