During Dilma Rousseff’s inauguration as president of the New Development Bank (NDB), in Shanghai, China, President Luiz Inácio Lula da Silva spared no criticism of the traditional model of financing international financial institutions. The NDB, also known as Banco do Brics (an economic bloc comprising Brazil, Russia, India, China and South Africa), does not have the participation of the International Monetary Fund (IMF) or financial institutions from countries outside the group. Fact highlighted by Lula.
“For the first time, a development bank with global reach is established without the participation of developed countries in its initial phase. Free, therefore, from the shackles and conditionalities imposed by traditional institutions on emerging economies. And more, with the possibility of financing projects in local currency”.
Lula continued to praise the bank’s role as an instrument to combat inequality. For him, the NDB should assist those most affected by climate and economic issues, helping them to recover. “Climate change, the pandemic and armed conflicts negatively impact the most vulnerable populations. Many developing countries accumulate unpayable debts. It is in this context that the creation of the NDB is imposed”.
In a ceremony filled with Brazilian deputies and ministers, members of Lula’s entourage on this trip to China, the Brazilian president spared no criticism of the IMF, whom he accused of “asphyxiating” Argentina. For him, banks should have “patience” and keep the word tolerance in mind when renewing their financing agreements.
“No ruler can work with a knife at his throat because he is in debt,” he said. “It is not up to a bank to suffocate the economies of countries as the International Monetary Fund is doing with Argentina”, he added.
Finally, Lula made a nod to the international community. On a broader note, she called for more generosity from people. “We cannot have a society without solidarity, without feeling. We have to be generous again. We’re going to have to learn to reach out again. We need to defeat the individualism that is taking hold of humanity.”
Dilma
In her inauguration speech, Dilma Rousseff also defended the bank’s social bias and assumed the NDB’s commitment to environmental protection, social and digital infrastructure. Indicating in all her speech the support for the poorest communities and the need to help them guarantee housing and more dignified conditions, the former president of the Republic asked for “common prosperity” for all.
“Assuming the presidency of the NDB is an opportunity to do more for the Brics countries, but also for emerging countries and developing countries”, he said. “I am confident that together we can realize our development vision. We want prosperity to be common to all countries,” he added.
Challenges
According to experts consulted by the Brazil Agencythe future president of Banco do Brics will have the opportunity to expand the institution’s international presence, but will face two major challenges: boosting projects related to the environment and circumventing the geopolitical impact of Western retaliation against Russia, one of the founding partners.
Created in December 2014 to expand funding for infrastructure projects and sustainable development projects in the Brics and other emerging economies, the NDB currently has around US$32 billion in approved projects. Of this total, approximately US$ 4 billion is invested in Brazil, mainly in highway and port projects.
In 2021, the Bank of Brics was joined by the following countries: Bangladesh, Egypt, United Arab Emirates and Uruguay.
