Day 52 – Q 4.How do ADB, AIIB and NDB differ in their composition, mandate and significance? Analyse.
4. How do ADB, AIIB and NDB differ in their composition, mandate and significance? Analyse.
एडीबी, एआईबीबी और एनडीबी कैसे उनकी रचना, जनादेश और महत्व में भिन्न हैं? विश्लेषण करें।
- Difference- Composition, Mandate and Significance.
AIIB and NDB presents an alternative to the existing American and European dominated World Bank and IMF. NDB began its operation from 2015 whereas AIIB from 2016. ADB started its operation in 1966.
From 31 members at its establishment, ADB has grown to encompass 67 members of which 48 are from within the Asia and Pacific region and 19 outside.
Only 5 countries hold membership in NDB. The AIIB has now grown to 87 approved members worldwide. All countries have equal voting weightage in NDB whereas in case of AIIB, it is based on capital contribution. The NDB is subregional because all the member countries are borrowers. The AIIB, however, has both borrower and lender countries. As an organization, then, it’s structure is comparable to the Asian Development Bank, World Bank and IMF.
- To make loans and equity investments for the economic and social advancement of developing member countries;
- To provide technical assistance for the preparation and execution of development projects and programmes and advisory services
- To promote investment of public and private capital for development purposes; and
- To respond to requests for assistance in coordinating development policies and plans of member countries.
The Asian Infrastructure Investment Bank (AIIB) is an international financial institution which is focused on supporting infrastructure construction in the Asia-Pacific region. Their mission is to improve social and economic outcomes in Asia. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, the objective is to better connect people, services and markets that over time will impact the lives of billions and build a better future.
Main difference between them is AIIB operates in Asia-pacific region but New Development Bank operations concentrate more in BRICS nations.
AIIB is mainly focused on bridging the gap between demand and supply of capital for development of infrastructure in the Asia-Pacific region whereas NDB is more centered on environmentally sustainable development projects.
- ADB’s main objective is to reduce poverty in the Asia Pacific region. Loans from the Asian Development Fund are made on highly concessional terms and almost exclusively to the poorest borrowing countries.
- The AIIB can benefit from being a “latecomer” to the family of international development institutions, learning from their experiences and adopting innovative ideas. Given that the bank is still in its formative stages, its other members have ample room to shape its development, and can focus on improving the efficiency of its bureaucracy.
By focusing on reducing red tape, the AIIB can act as a nimble, efficient vehicle for growth and development in Asia.
- The NDB intends to plug the gap between the availability of finance and current investment infrastructure needs. In doing so, the NDB will theoretically give emerging economies a greater proportion of representation in global developmental finance.
Economic growth and development depend to a great extent upon connectivity, energy security and communication facilities. It is a new time for setting up new relationships, on equal grounds, and choosing whom to deal with, instead of being forced to a certain financial and political clique. The multipolar world order is coming to an end. The AIIB and NDB is an indication of the same.
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