BRICS NDB: Turning global finance's predictability into a delightful surprise party for the G7, World Bank, and IMF

Clash between BRICS NDB Bank and World Bank/IMF: Geopolitical Impacts on the Global Economy. Well, isn't it just the epitome of surprise that the BRICS nations, once considered the underdogs, are now seemingly on the brink of rivaling the almighty G7, the World Bank, and the IMF combined? I mean, who could have ever imagined such an audacious feat? The prospect of these emerging economies shaking up the equilibrium of world politics is just the cherry on top of this unforeseen turn of events. Oh, how the tables have turned! BRICS is already the world’s largest gross domestic product (GDP) bloc in the world. It currently contributes 31.5 per cent to the global GDP, ahead of the G7, which contributes 30.7 per cent.

?Executive Summary:?The growing tensions between the BRICS New Development Bank (NDB) and traditional financial institutions such as the World Bank and the International Monetary Fund (IMF). The clash reflects the changing dynamics in global finance and has far-reaching geopolitical implications on the world economy.?Or BRICS is a weapon against - US after Ukraine War and Gaza Conflict. With inflation hitting many western countries, resulting in slower economic growth and causing social unrest, nations in the Global South are taking the opportunity to develop their own economic alternative. This means that groups like BRICS will cease being exclusively economic institutions. The struggle is now very political.

?Introduction:?The establishment of the BRICS New Development Bank in 2014 signaled a shift in the global economic landscape. Comprising Brazil, Russia, India, China, and South Africa, the BRICS nations aimed to challenge the dominance of Western-led financial institutions, primarily the World Bank and IMF. As the BRICS NDB gains prominence, conflicts with the existing financial order are becoming more evident.?BRICS financial institutions are operating against, or within, existing global financial governance, the ability of China to guide the BRICS is acceptable to whom? The worst part is BRICS Countries have over corrupt practices then considered with West they have this advantages.

?Formation of BRICS NDB:?The BRICS NDB was created to provide an alternative source of funding for infrastructure projects in developing countries, reducing reliance on the World Bank and IMF.?It symbolizes a desire for greater representation and decision-making power for emerging economies in the global financial architecture.

?Challenges to World Bank and IMF:The BRICS NDB challenges the traditional lending practices of the World Bank and IMF by offering loans with fewer conditionalities and a more inclusive governance structure.This competition has led to concerns among Western powers, who perceive the BRICS NDB as a challenge to their influence in global economic affairs.?Having said that - World Bank as the name appears - it has funded the world economy, and China nad India are almost highest borrower. It will tighten the nose and neck for both Countries - if they go against the, IMF and World Bank.

?Geopolitical Impacts:?Shifting Power Dynamics?to local new currency but not the right time. The clash highlights a shift in global power dynamics, with emerging economies asserting themselves on the international stage.?Traditional powers may perceive this as a threat to their influence, potentially leading to increased geopolitical tensions.?Under these circumstances, World Bank and IMF combined will be able to suffocate the BRICS NDB and the Countries involved. The only way is asking the refund and grading the rating of Countries by new methods. It will create havoc in Asian Economy.

?Regional Influence:?The BRICS NDB provides its member nations with a platform to exert influence regionally and globally, challenging the hegemony of Western-backed institutions.This could lead to a redistribution of economic and political influence, impacting the traditional alliances that have defined the post-World War II era. In all the respects discussed above, the NDB is a high-risk institution. However, this view is not widely shared among establishment. Or they are undermining the threat. There is an internal threat - too - Reflecting power relations within the BRICS, both new institutions have vital Chinese influences.

?Implications for Borrowing Nations: Developing countries now have more options for funding infrastructure projects, reducing dependency on Western institutions.?The competition between lenders may result in better terms and conditions for borrowing nations.?The problem is in what terms - and how much? If World Bank and IMF summons the Borrower - for payments - how many countries can pay even the installments against the loan. The CAPEX difference between BRICS NDB and World Bank and IMF is huge. No comparison.

?Economic Implications:?Market Dynamics?is not in favour weaponizing an institution. If China really wants its currency to one day take the place of the dollar, and if Russia wants to find routes out of the current squeeze represented by financial sanctions, the pace at which this is happening is agonizingly slow. The clash influences market dynamics as nations may now have a broader range of financing options?as BRICS NDB has poor CAPEX. Investors may reassess risks and returns, leading to potential shifts in global capital flows.

?Currency Dynamics:?The rise of the BRICS NDB could impact the dominance of the U.S. dollar in global trade, as alternative currencies gain prominence in transactions.?It will further neutralizes the existence of United Nations which is governed poorly si8nce its inception. Too many laws, and India out of the Security Council shows mindset of West and US. Hence they are forced to find an alternative. Reassessment on both side is needed. In this context, macro-economic stabilization has been in China’s self-interest, but it is affecting India, protecting Russia, as what with Beijing’s ongoing financing of Washington’s massive trade deficit (typically the Chinese state holds more than $1.3 trillion of US Treasury Bills). A trade war with US may change this. But what is ultimately required, to assure durable world economic stability, is a new currency that could be more democratically managed, in contrast to the US Federal Reserve Board’s current bias to serving the interests of the West’s largest banks. Macro-economic context, currency exposure, corruption and climate change will take centre stage soon in BRICS NDB.

?Recommendations:?Dialogue and Cooperation?is needed. The biased mindset will not work. On other hand challenging US Economy is not in good interest of anyone after pandemic. I find almost every countries economy condition ?is at the verge of sinking, and political masters ego may jeopardize the life of poor people as a ripple effect. Hence, encourage dialogue between the BRICS NDB, World Bank, and IMF to foster cooperation and address concerns on both sides.

?Reform Existing Institutions:?The time has come, and US is already sitting on debt Bomb of 31 Trillion Dollar and China is having serious meltdown. Indian economy is also run by investment made by Government of India only. Hence, Reform traditional financial institutions to reflect the changing global economic landscape, ensuring fair representation for emerging economies.

?Global Governance Reassessment:?Encourage a reevaluation of global governance structures to accommodate the rise of new economic powers, fostering a more inclusive and cooperative international order.

?Conclusion:?The clash between the BRICS NDB and traditional financial institutions reflects the evolving nature of global economic power. As these dynamics continue to unfold, it is crucial for nations to engage in diplomatic efforts to mitigate tensions and work towards a more collaborative and inclusive global economic framework. Failure to address these issues may lead to increased geopolitical instability, impacting the economic well-being of nations worldwide.

?Finally, out of curiosity, I searched, and found out that - There seems to be no such clash between the Brics Bank and the World Bank. The Brics Bank, also known as the New Development Bank, is an international financial institution established by the BRICS countries (Brazil, Russia, India, China, and South Africa) in 2014. Its purpose is to foster economic cooperation among the member countries and provide financial assistance for infrastructure and development projects.

?On the other hand, the World Bank is a global financial institution established in 1944 as part of the Bretton Woods system. It provides financial assistance to developing countries for various projects aimed at reducing poverty and promoting economic development. While both institutions are involved in providing financial assistance for development projects, they have different mandates and operate independently of each other. There have been no reports of any direct conflicts or clashes between the Brics Bank and the World Bank.