The BRICS alliance is one of the most important new economic blocs seeking to limit the dominance of the dollar in trade movements.
By: Mohamed Zain
Sun, Apr. 16, 2023
It appears that the global economic map is on its way to partial change as officials from the BRICS countries, which include the world's largest emerging economies, launched what is known as the New Development Bank (NDB) based in Shanghai, China, a few years ago.
Some interpreted this move as an alternative or a competitor to established institutions such as the World Bank. In the following lines, we will cover the most important information about the NDB, its main goals, capital, and the countries benefiting from it.
The bank will finance infrastructure and development projects in the BRICS economies, which are Brazil, Russia, India, China, and South Africa.
The BRICS alliance is one of the most important new economic blocs seeking to limit the dominance of the dollar in trade movements. The group is also seeking to reach a consensus on a unified currency for international trade.
The establishment of the NDB comes after a long wait since the proposal to establish it for the first time in 2012. The bank's inauguration was delayed due to disagreements over its financing, management, and headquarters.
The initial capital of the NDB was $50 billion, equally shared by the five member states, who also share equal voting rights. The capital was then increased to $100 billion within two years of its inauguration in 2015.
Since its inception, the NDB has approved around 80 projects for all its members with a total investment of $30 billion, according to statistics published in 2021 following Bangladesh's accession.
These projects include sectors such as transportation, water and sanitation, clean energy, digital infrastructure, social infrastructure, and urban development.
Egypt joined the bank, according to the decision of the President of the Arab Republic of Egypt, No. 628 of 2022, approving the agreement to establish the New Development Bank affiliated with the BRICS group and the document of the Arab Republic of Egypt's accession.
This move will open up more investment opportunities for the country in infrastructure projects and sustainable development, especially in light of the ongoing cooperation between Egypt and the NDB.
The establishment of the NDB is a significant shift in the global financial landscape, as it provides emerging economies with an alternative to traditional institutions such as the World Bank and the International Monetary Fund.
With a capital of $100 billion, the NDB is the largest multilateral development bank established in the last 50 years. Its focus on sustainable development and infrastructure projects has the potential to promote economic growth and create jobs in the BRICS countries and beyond.
Egypt has become a member of the New Development Bank (NDB) after successful negotiations by the NDB board with potential members in late 2020. The announcement of Egypt's membership was made during the BRICS summit in December 2021.
The Egyptian Parliament states that Egypt will benefit from its membership in several areas of the bank's multifaceted activities. The bank's focus is on sustainable development, regional cooperation and integration, primarily through infrastructure investment, including various sub-sectors such as energy, transportation, water, and telecommunications. The bank's operations also include the health and social infrastructure sectors, and it extends its activities to the digital realm.
Regarding environmental, social, and procurement standards, the NDB uses only national standards for member countries' operations. The NDB aims to provide the necessary resources and technical assistance to implement projects related to member countries' national development priorities.
During the Climate Summit held in Sharm El-Sheikh in November 2022, the president of the NDB, Marcos Troyjo, confirmed his desire to build a strong partnership with Egypt in the coming years.
He emphasized that the bank has massive financing capabilities and advanced international expertise that can help Egypt meet its financial needs. The NDB is a new platform for Egypt to strengthen its cooperation with the BRICS group and other emerging economies and developing countries in the fields of infrastructure and sustainable development.
The Egyptian Minister of Planning and Economic Development, Hala El-Said, stated that the NDB's strategy aligns with Egypt's vision for sustainable development. Egypt looks forward to enhancing its cooperation with the NDB in areas of mutual interest, benefitting from the bank's expertise and resources to achieve its development goals.