In a significant development, the New Development Bank (NDB), popularly known as the BRICS bank, is reportedly engaged in discussions with Saudi Arabia to become its ninth member. This move aims to enhance the funding options of the NDB amidst the ongoing Russia-Ukraine conflict and global de-dollarization efforts. The Financial Times recently reported the ongoing constructive discussions between the NDB and Saudi Arabia, acknowledging the kingdom's pivotal role in the Middle East.
Established in 2015, the NDB focuses on mobilizing resources to support infrastructure and sustainable development projects in the BRICS nations and other emerging economies. Comprising Brazil, Russia, India, China, and South Africa, the BRICS countries collectively account for a quarter of global GDP. The NDB has already expanded its membership to include the United Arab Emirates, Uruguay, Bangladesh, and Egypt.
Since its inception, the NDB has approved over 90 projects, amounting to $32 billion in loans, as reported by yicai.com in October 2022. The potential addition of Saudi Arabia to the NDB is expected to bolster the resilience of the BRICS nations in navigating the challenges posed by the global de-dollarization trend.
Experts highlight the crucial role of the NDB in crisis prevention and underscore the potential contributions of Saudi Arabia. Pan Helin, the joint director of the Research Center for Digital Economics and Financial Innovation at Zhejiang University's International Business School, emphasized the NDB's ability to avert financial crises within the BRICS countries. He believes that Saudi Arabia's stable financial condition and low risk potential make it an ideal candidate for membership, further strengthening the financial robustness of the BRICS fund pool and enhancing crisis management capabilities.
As the US dollar faces uncertainties, developing economies are increasingly exploring alternatives, leading to a growing consensus on de-dollarization. Dong Dengxin, the director of the Finance and Securities Institute at Wuhan University of Science and Technology, noted that these economies actively seek alternatives to reduce dependence on the US dollar.
With Saudi Arabia's potential entry into the NDB, the global financial landscape could witness significant shifts as the BRICS nations and other emerging economies strive for greater financial independence and resilience amid evolving geopolitical and economic dynamics.
