In-depth reform of international institutions, which are too negligent towards the needs of emerging economies: “On this subject, the New Development Bank is leading the way”boasted the South African President, Cyril Ramaphosa, Wednesday, August 23, in Johannesburg.
His country hosted the fifteenth summit of the BRICS (Brazil, Russia, India, China, South Africa), meeting from August 22 to 24 to discuss, among other things, ways to limit the hegemony of the dollar and Westerners over the financial system. global.
In recent months, US sanctions against Russia have exacerbated this ambition, which the BRICS have long displayed. In 2014, they created the New Development Bank (NDB), precisely with the aim of being an alternative to the International Monetary Fund (IMF) and the World Bank.
“Unipolar system”
Based in Washington, these two institutions, born after the Second World War, have been reluctant for years to reform to give more space to emerging countries in their governance. “So far, the system has been unipolar, it will be replaced by a more multipolar system”assures Dilma Rousseff, president of the NDB and former president of Brazil (2011 to 2016), in the FinancialTimes August 23.
Unlike the IMF, the NDB does not attach binding conditions to its loans, such as structural reform requirements, sometimes perceived as interference by the assisted countries. “We don’t do that. insists Dilma Rousseff, in the FT. We respect the policies of each state. »
Based in Shanghai, with an initial capital of 50 billion dollars (approximately 46.1 billion euros) provided in equal shares by the five founders, it has financed 33 billion dollars of infrastructure and development projects since its creation. Egypt, Bangladesh and the United Arab Emirates have recently joined its ranks.
Highlighted at the fifteenth BRICS summit, it nevertheless remains in the shadow of the Asian Infrastructure Investment Bank (AIIB). Created at the instigation of China in 2014, again to counterbalance the institutions of Washington, it is more active and better endowed.
“Something Ironic”
Above all, since the start of the war in Ukraine, the NDB has been accumulating difficulties. To evade Western sanctions, it suspended all operations in Russia. But Moscow still holds nearly 20% of its capital, so international investors, especially Americans, are reluctant to grant it new loans.
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