BRICS Nations to Expand Their Development Bank in Asia, Latin America, Africa

EFE. November 14, 2019

BRASILIA – The leaders of the BRICS group of five leading emerging market economies pledged Thursday to strengthen that bloc’s multilateral development bank so it can finance a greater number of projects in Asia, Latin America and Africa.

At the close of a two-day summit in Brasilia, the presidents of Brazil, Russia, China and South Africa and India’s prime minister agreed to expand the activities of the New Development Bank and increase the number of member countries.

The expanded membership of the NDB will strengthen the bank as a “global development finance institution,” one of the 73 points of the 11th BRICS Summit – Brasilia Declaration reads.

Founded with a subscribed capital base of $50 billion, the total value of projects financed by the NBD only amounts to $10 billion.

Around 500 BRICS business leaders who had gathered on the first day of the Brasilia forum on Wednesday demanded greater NDB financing, especially for infrastructure and renewable energy projects.

The pledge to strengthen that institution will “further contribute to the mobilization of resources for infrastructure and sustainable development projects in BRICS” and other emerging markets and developing countries, the declaration read.

Official sources told EFE that efforts will be made to expand the NBD in Africa, Latin America and Asia, adding that it will be a gradual process and that not many new developments should be expected in the short term.

The NBD is headquartered in Shanghai, while regional offices are being opened in Russia, India and Brazil to coordinate projects in the different regions.

The summit’s host, Brazilian President Jair Bolsonaro, said at the close of the gathering that the bank “is one of the most visible outcomes of the BRICS bloc” and must be consolidated as an infrastructure financing institution.

Chinese President Xi Jinping, Russian head of state Vladimir Putin and Indian Prime Minister Narendra Modi echoed that sentiment.

South African President Cyril Ramaphosa said for his part that the countries are ready for the development bank to extend beyond BRICS and become a global institution.

He added that expanded NDB activities in Africa would help overcome that continent’s enormous infrastructure financing deficit, which he sees as a major barrier to its development.

Summit attendees also called for greater cooperation within the bloc on technology and innovation to further consolidate BRICS’s share of global trade, which already stands at roughly 40 percent.

“It’s essential to place more emphasis on science, technology and innovation,” Bolsonaro said.

“Innovation today is the only path to development” in a world undergoing an “unprecedented technological revolution,” Xi said.

Putin said cooperation was particularly important in the energy sector and in the renewable and clean energy area in particular.

Ramaphosa asked the other partners in the bloc to help promote a friendlier business environment to ensure economic growth with social inclusion, while also adding that South Africa, mainly a raw material exporter, needs to transition to higher value-added trade.

In their joint declaration, the BRICS nations again insisted on the need to reform the United Nations, the International Monetary Fund, the World Trade Organization and other international organizations and make them “more inclusive, democratic and representative” by giving emerging markets and developing countries a greater role in international decision-making.

In the document, China and Russia also expressed support for the aspirations of Brazil, India and South Africa to play more significant roles at the United Nations.

With respect to the WTO, the group of major emerging market economies stressed the essential importance of rules-based, transparent, non-discriminatory, open, free and inclusive international trade and expressed their commitment to preserving and strengthening the multilateral trading system.

In that regard, the declaration said it is essential that all WTO members avoid unilateral and protectionist measures that are contrary to the spirit and rules of that organization.

They also called on developed countries to “scale up the provision of financial, technological and capacity-building assistance” to developing countries with a view to supporting actions aimed at mitigating and adapting to climate change.

The five BRICS countries, which are among the world’s biggest polluters, reaffirmed their commitment to sustainable development in a “balanced and integrated” manner.

The declaration added that “all our citizens, in all parts of our respective territories, including remote areas, deserve to fully enjoy the benefits of sustainable development.”