Stepping up Dialogue and Cooperation on Development Download
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In pursuing its mandate, NDB taps into a unique pool of human and technical resources. Learning from the experience of its member countries, which constitute 42% of the world’s population, the Bank can share their lessons and contribute to the global development community. New members and a talent-intensive institution are integral parts of providing high- quality development finance by leading development networks and advancing international dialogue and cooperation. Chapter 3 Stepping up dialogue and cooperation on development New Development Bank | Annual Report 2020 23 Highlights from the BRICS and international cooperation 24 New Development Bank | Annual Report 2020 Cooperation on development We want to position the NDB as a premier development bank for emerging economies Mr. Marcos Troyjo President Russia, 2020 2020 BRICS Summit and related meetings Moscow Declaration On November 17, 2020, during the 12th BRICS Summit organised In the 12th BRICS Summit, the BRICS leaders adopted the by the Russian Chairmanship, NDB’s President Marcos Troyjo Moscow Declaration, under the theme ‘BRICS Partnership reported to the BRICS leaders on the Bank’s achievements and for Global Stability, Shared Security and Innovative Growth’. outlined five priorities for the next five-year cycle, namely: The declaration highlights understandings and achievements of the BRICS strategic partnership in the three pillars of policy (i) to position NDB as a premier development bank for and security; economy and finance; and culture and people-to- emerging economies; people exchanges. (ii) to play a leading role in the conversation on what Under ‘Economy and Finance, Intergovernmental Cooperation’, development policy means in the 21st century; the BRICS leaders acknowledged the initiative of exploring and sharing relevant and already existing national data on (iii) to make progress in membership expansion in a gradual infrastructure and investment projects into a common Data and responsible way; Room on a voluntary basis, and noted NDB’s possible engagement in the initiative. They voiced their support for (iv) to increase the complexity and outreach of our operations; and NDB’s timely measures in helping member countries combat COVID-19 and commended NDB’s remarkable achievements (v) to make NDB a talent-intensive institution and strengthen made in the past five years. They expressed appreciation for the Bank’s role as a platform for international cooperation. the leadership of former President K.V. Kamath and welcomed President Marcos Troyjo. Leaders also welcomed the opening of the NDB Eurasian Regional Centre in Moscow and the future On November 9, 2020, the NDB President participated in the opening of an NDB regional office in India in 2021. They also Finance Ministers and Central Bank Governors Virtual Meeting expressed their support for NDB’s membership expansion held under Russian Chairmanship. Discussions included the based on relevant decisions by NDB’s Board of Governors. outcomes of the G20 Saudi Presidency in 2020, a joint digital platform to encourage infrastructure investment and the expansion of NDB’s membership. As in previous years, in 2020, the President of NDB participated in the BRICS Interbank Cooperation Mechanism and the New Development Bank Financial Forum, held on November 16, which included the participation of CEOs of national development banks of BRICS countries. NDB’s President also took part in the See more Watch President Plenary Session of the BRICS Business Forum, organised by the Marcos Troyjo’s BRICS Business Council. Both sessions offered an opportunity address to the for interactions with partners of the Bank. BRICS leaders New Development Bank | Annual Report 2020 25 The BRICS This section starts with a description of 11 the global context for the BRICS economies economies in 2020 in 2020 and global trends in infrastructure investment, followed by a brief account of the evolution of economic activity in individual BRICS economies. It also highlights some policy developments with potential impact on future infrastructure and long-term investment in each of them. Global context BRICS economies made great efforts battling against the pandemic and the resulted socio-economic impact by providing he COVID-19 outbreak had a severe policy stimulus. On the basis of strong fiscal and monetary impact on the global economy in 2020. In support, economic growth started to recover in Q3 for all BRICS, addition to the pressure on national health except China, which started rebounding in Q2. The IMF projects that BRICS economies will recover steadily in 2021 and maintain systems, social safety nets and the fiscal growth in the coming five years. Calculations predict that the Tstance, domestic cross-border restrictions on the BRICS economies would constitute a larger share of the global mobility of goods and personnel interrupted both GDP in PPP than G7 countries from 2021.14 the supply and demand of products and services, leading to unemployment, bankruptcies and As a group of middle-income economies aiming to severe impact on people’s livelihood. In April achieve sustainable development, BRICS countries continued 2021, the IMF expected global GDP to contract by making strategic development plans and promoting reforms amid the economic disruptions of 2020. Brazil continued its 3.3% in 2020 compared with 2019, with EMDCs structural reforms, such as the approval of the New Sanitation declining by 2.2% and Advanced Economies (AEs) Framework, and launched a Federal Development Strategy; contracting by 4.7%. The IMF expected the global Russia issued National Goals and Strategic Objectives trade volume in 2020 to decline by 8.9% and to outline key development goals through to 2024; India UNCTAD projected a fall of 42%12 in global introduced additional flexibilities to the labour market and Foreign Direct Investment (FDI). launched a national programme to enhance infrastructure project management and policy framework; China promised to make its economy more environmental-friendly and to Countries around the globe responded with rapid and massive attain carbon neutrality by 2060, and pledged to invest in stimuli amounting to 13.5% of global GDP, which supported a new infrastructure; South Africa proposed an Economic gradual recovery in economic activity in the second half of 2020. Reconstruction and Recovery Plan to improve the country’s The GDP growth of most major economies turned positive in infrastructure and encourage private capital participation. These Q3 2020; global trade and investment into emerging economies policies, if properly implemented, would boost BRICS’ future improved; and major financial market indices and some commodity development and the improvement of their people’s livelihood. prices surpassed the level before the pandemic. However, there remain significant uncertainties regarding the total containment Meanwhile, BRICS countries continue to be an important force of the pandemic and future economic development still faces of infrastructure investment. Estimates suggest that the world’s severe challenges, such as divergence of financial markets total annual infrastructure investment is expected to reach USD and the real economy, the fragility of global supply chains, the 3.3 trillion in 2030 (an average growth of 1.9% from 2020 to 2030) infrastructure investment gap against the backdrop of elevated and BRICS’ share of the world’s infrastructure spending would debt levels, and the rising inequality across income groups. steadily increase in the coming decade, reaching 42% in 2030. This not only leads to ample business opportunities for NDB and BRICS GDP in 2020 is expected to contract by 0.9%, lower other investors, but also brings bright prospects for sustainable than the average decline of EMDCs (2.2%) and AEs (4.7%). development of BRICS economies. 11 Unless noted otherwise, data in this section are obtained from the World Economic Outlook, April 2021, International Monetary Fund (IMF). Indicators herein included reproduce authoritative statistics from different sources, as indicated, and the discussion content has no predictive intent or is meant to substitute for each member countries’ official economic and financial agencies’ documents. 12 FDI estimates are obtained from the UNCTAD Global Investment Trend Monitor, No. 38, 24 January 2021. 14 Data obtained from the World Economic Outlook, April 2021, International Monetary Fund (IMF). 26 New Development Bank | Annual Report 2020 Cooperation on development Real GDP growth % 2019 2020 2021 2022-2025 15 10 5 0 -5 -10 -15 World Advanced Emerging Markets Brazil Russia India China South Africa Economies and Developing Economies Source: World Economic Outlook, April 2021, Note: For India, data and forecasts are presented on a fiscal year basis, with International Monetary Fund, and NDB’s staff calculations. FY2020/2021 starting in April 2020. Brazil 2020 growth data is obtained from IBGE. South Africa 2020 growth data is obtained from the South African Reserve Bank. Fiscal measures in response Share of world GDP in purchasing to the COVID-19 pandemic power parity: BRICS and G7 % % of GDP Above the line measures G7 Liquidity support BRICS 20 35 33 15 31 10 29 5 27 25 Brazil Russia India China South Global 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Africa Source: Database of Country Fiscal Measures in Response to the COVID-19 Source: World Economic Outlook, April 2021, International Monetary Fund. Pandemic, International Monetary