'Korea Society for Computational Fluids Engineering'
Abstract
The BRIC acronym was created at the beginning of the 2000s to represent a group of four
fast-growing economies – Brazil, Russia, India and China – and was changed to BRICS in
December 2010 with the inclusion of South Africa. At its fifth annual summit in Durban at the end of March 2013, the group announced the future establishment of a New Development Bank (NDB) to meet infrastructure investment needs in the developing world. At their sixth annual summit in Fortaleza the following year (July 2014), the BRICS finally agreed on the broader arrangements for the bank – an initial US50bnfund–andcoupledthisachievementwiththelaunchoftheContingencyReserveArrangement(CRA)–US100bn to be accessed to alleviate members’ financial difficulties (US41bnfromChina,US5bn from South Africa and US18bnfromeachoftheothers).TheBankwillstartlendingin2016.Despitethisachievement,commentatorsestimatethateveniftheNDBeventuallyincreasesitscapitaltoUS100bn with injections from non-BRICS states and institutions (up to a maximum capital share from non-BRICS countries of 45 per cent), most infrastructure needs in the developing world will remain unmet. Compared to the World Bank and Asian Development Bank – whose subscribed capital is US223bnandUS162bn respectively – the additional capital available from the NDB is too small to fill the financing gap (Spratt 2014). According to World Bank estimates, South Asia alone requires US2.5tnoverthenexttenyears,whileoveralltheBRICSstatesareestimatedtoneedatotalofmorethanUS4.5tn over the next five years for infrastructure development. In consideration of the limited amount of lending that the NDB may provide, the bank may create ‘special funds’ – i.e. separately funded and managed mechanisms – designed to get round this capital constraint (Spratt 2014).UK Department for International Developmen