The BRICS have been stymied on a number of fronts in the efforts by a number of its original members—Russia, Brazil and China in particular—to create a new financial architecture to not only get around Washington’s deadly trade sanctions policies, but also provide a major flow of credit for development projects free of the speculative cancer of the dollar-based trans-Atlantic system and the International Monetary Fund’s destructive conditionalities.
Although de-dollarization or trade in national currencies has increased substantially between Global South countries, the BRICS New Development Bank (NDB) has not been able to assume the role of becoming a major lender of non-dollar productive credits for infrastructure, in part because its own charter defines it as a dollar-based institution, and it has had to comply with the trans-Atlantic system’s criteria of credit-worthiness. As a result, to date the NDB has a meager portfolio of $40 billion in loans issued—whereas global great infrastructure projects would require 100 times that amount.
Another obstacle has been the cautious (not to say cowardly) view among some BRICS members that they don’t want to draw fire from the City of London and Wall Street by proposing fundamental changes in the international financial architecture. Some have opted, thus far, for seeking a more comfortable berth on the sinking Titanic.
Russian Prime Minister Mikhail Mishustin therefore trod lightly in his May 15 welcoming remarks to the 11th annual meeting of the Board of Governors of the New Development Bank, held in Moscow. “Over the years, the [NDB] bank has become a pillar of the emerging financial system in the Global South,” he said hopefully. “The NDB has everything it needs to become an international innovation bank.… Russia consistently advocates for the development of a fair and sustainable financial system that will provide greater opportunities for countries in the Global South. The New Development Bank has a special role in this. We support efforts to further diversify its portfolio, actively develop complex cooperation chains, and increase the share of transactions in the national currencies of BRICS and its partners.”
In comments made the same day at a BRICS ministerial meeting in New Delhi, Russian Foreign Minister Sergey Lavrov emphasized a proposal made by President Vladimir Putin at the end of the 2024 BRICS summit in Kazan, Russia, in an effort to work around the limitations being placed on the NDB that had surfaced at Kazan, and to bring about the major changes needed: “As a promising tool, Russia proposes creating a new investment platform that would allow for the accumulation of substantial funds,” Lavrov stated May 15, “including through the use of digital assets, to implement development projects within our association and across the Global South and Global East as a whole…. I would add that the operational strategy of the New Development Bank and its functioning model must be adjusted accordingly to meet the new requirements of the current geo-economic crisis,” the Russian Foreign Minister clarified.
