CAF and New Development Bank Establish Strategic Alliance

The meeting was a response to the interest of CAF and the NDB, the financial arm of the block of emerging powers known as BRICS, in deepening cooperation among the so-called Global South, an alliance of developing countries that reflects the growing influence of the developing world in the new world order, in which the BRICS countries are called upon to occupy a prominent role.

"Development banks play a vital role in promoting socially inclusive and sustainable development," said García. "As institutions of the Global South, CAF and NDB have reasons to be and have aligned interests. Exploring possibilities for mutual cooperation is fundamental." 

During the meeting, held in the historical Mayflower hotel in Washington D.C., in the context of the IMF and World Bank's spring sessions, information exchange and best practices were promoted among the two institutions, given the progress made by the NDB and the challenges faced by the CAF in financing projects in Latin America.

The meeting was held within the framework of South-South Cooperation, an initiative that promotes a broad collaborative agenda between developing countries in the political, economic, social, cultural and environmental fields, with the objective of exchanging knowledge, experiences and resources. The deepening of this cooperation in recent years has been reflected in the increase in South-South trade and in the flows of investment and technology transfer.

The New Development Bank, previously known as the BRICS Development Bank, is a multilateral bank established by the BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the current system dominated by the World Bank and the International Monetary Fund.

The NDB's mission is to promote greater financial cooperation for the development of these five emerging powers and to finance infrastructure and sustainable development projects.

The four countries that originally made up the BRIC group (Brazil, Russia, India and China) represent a market of more than 3 billion people, equal to 41.4 percent of the world population, and represent more than 25 percent of the global Gross Domestic Product.

The bank is based in the Chinese city of Shanghai and is structured in such a way that each member country has one vote and no state has veto power.

Currently, the members are the BRICS countries, but there is a group of 11 countries that may be added, due to their potential to become economic powers this century, including Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Turkey, South Korea and Vietnam.

CAF, on the other hand, is the development bank of Latin America, for Latin America. Comprised of 17 Latin American and two European countries, and 14 private banks, the institution promotes sustainable development with social inclusion and regional integration.