During its annual Board of Governors summit, which met in Cape Town, South Africa over Aug. 29-31, the topic of a new financial architecture was repeatedly raised as a task for the New Development Bank and for the BRICS more broadly. NDB President Dilma Rousseff spoke, clearly identifying the overindebtedness of the Western-dominated financial system, which currently has a combined debt of $87 trillion just among the top ten most developed countries.
“For developing countries, indebtedness becomes an excessive burden,” Rousseff said, a debt which is “growing too much and too fast.” Therefore, she insisted: “systemic changes, especially in the international financial architecture, are urgently needed.”
As EIR has documented, developing countries are now spending 42% of their budgets merely on payments to service their debt. This is a crushing situation that is a relic of a speculative international financial architecture which loots the poorest and prevents economic development—a reality which has only accelerated following Covid-19 and the rapid increase in interest rates imposed by the U.S. Federal Reserve.
Rousseff went on to announce that the NDB plans to increase the use of national currencies to 30%. More importantly, she said: “sustainable economic development requires also an industrial basis and capacity in science, technology and innovation that contribute to an expansion of productivity and better jobs.” This emphasis on increasing productivity through science and innovation holds the key to rapid economic advancement—far more than merely transitioning to trade in national currencies.
