The New Development Bank, the lender created by the BRICS group of nations, will widen its membership as it seeks to boost its capital and counter the influence of Western-dominated multilateral banks.
(Bloomberg) — The New Development Bank, the lender created by the BRICS group of nations, will widen its membership as it seeks to boost its capital and counter the influence of Western-dominated multilateral banks.
The lender — formed by Brazil, Russia, India, China and South Africa — will look at increasing the diversity of its members in terms of geography, development stages and on the size of the countries, Dilma Rousseff, the bank’s president, said at its annual meeting in Shanghai on Tuesday.
Saudi Arabia is the latest to discuss joining the bank, the Financial Times has reported, a move that would give the lender more financial muscle. The bank was created in 2014 as a counterweight to the International Monetary Fund and the World Bank.
The bank’s membership is open to any country within the United Nations. Bangladesh and the United Arab Emirates became members in 2021, while Egypt joined in February. Uruguay is a prospective member, according to the NDB’s website.
Read More: How BRICS Became a Real Club and Why Others Want In
Rousseff, Brazil’s former president, said the new members would contribute resources to the bank to support the diversification of its portfolio and increase its capacity to mobilize funds.
“As a former president of a developing country I know how important multilateral banks are, and how much of a challenge it is to obtain finance or to raise funds on the scale needed to address social and economic challenges in our countries,” she said.
Rousseff said the bank would finance more projects in local currencies in order to strengthen domestic markets and protect its borrowers from the risk of currency fluctuations. Members have currencies that are not fully convertible within the current architecture, she said, and the economies of the global south suffer the impact of sudden fluctuations in their exchange rates.
“The world is going through a transformation process and it’s not about one currency against any another one,” she told a press briefing in Shanghai. “NDB will continue seeking funds in the dollar market but also in the Asian market.”
The bank is on track to meet its goal of 30% of its project funding in local currencies by 2026, Vice President and Chief Financial Officer Leslie Maasdorp said at the briefing. The current level is about 22%
China’s Vice Premier Ding Xuexiang, speaking at the NDB’s meeting earlier Tuesday, said he hoped the bank will continue to invite more partners for cooperation, use more resources to support the development of emerging nations, and focus on infrastructure spending.
Various countries “could be at various stages of discussion at different points in time” about membership, NDB’s Vice President and Chief Risk Officer Anil Kishora said. Theoretically all emerging economies and developing countries can be members but they also need to go through their own internal processes and “that takes time,” he said.
(Updates with comments from press briefing from eighth paragraph.)
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