The presidents of Iran and Russia, Masoud Pezeshkian and Vladimir Putin, each emphasized that they want to see the BRICS New Development Bank (NDB) become “the principal engine for financing infrastructure and energy in member countries,” as the Iranian president put it. Addressing the BRICS Business Forum, which met on Sept. 11, Pezeshkian said that “one of the most important steps is to expand the use of national currencies in trade among the members [of the BRICS]. This step must be accompanied by the establishment of the necessary instruments for managing currency risks and reciprocal settlements,” he said.
“Since the current financial system is vulnerable to political shocks due to its concentration on a limited number of currencies,” Pezeshkian added, “in order to transform trade cooperation into real investment, the New Development Bank must become the principal engine for financing infrastructure and energy in member countries through dedicated credit lines, financing in local currencies and guarantee instruments for attracting private capital.”
Until now, the NDB has played only a modest role in such financing, in part because it is a dollar-based institution that depends on financial markets centered in the City of London and Wall Street, and in part because it was forced to abide by the financial sanction that the West imposed on Russia.
Russia’s Putin echoed Pezeshkian’s thinking in his own remarks to the Business Forum: “I would like to add that the development of business ties implies the use of effective financial mechanisms. The New Development Bank is working on this. Russia has proposed using it as the basis for creating a new investment platform, which will help us attract additional private funds to infrastructure, technology and other fields that underlie the competitiveness of our states. We hope that this initiative will be supported by members of our association.”
The same day, Putin also met in New Delhi with NDB president Dilma Rousseff, remarking: “We met not long ago in Moscow, where we discussed matters relating to our cooperation with the New Development Bank and the Bank’s involvement.” He continued: “We advocate the involvement of as many participants as possible in its work, and for its programs to be broader in scope—covering a greater number of economic sectors within the BRICS member countries.”
Putin added: “You are also aware of our proposals regarding the creation of new platforms, including investment-oriented and digital ones, to expand the Bank’s capabilities and make them more versatile, enabling the Bank, together with its participants and shareholders, to achieve even greater results.” He concluded on a suggestive note: “Working with our partners in the Bank’s member countries, we will find new instruments to boost the operations of this vital financial institution.”
Rousseff replied by thanking Putin for his support for their joint work, and insisted: “I believe that the Russian Federation’s participation in the NDB is vitally important—both for strengthening the Global South and for the BRICS organization as a whole…. I am very optimistic about the future, as we have taken steps to address the difficulties and the profound injustice the Russian Federation faced on the part of the Bank. After all, the Russian Federation has always played a pivotal role and acted with integrity towards the Bank.” She was referring to the NDB’s having frozen project financing for Russia (which holds an equal 19.42% share in the institution) to comply—on pain of the NDB itself otherwise being denied access to Anglo-American-dominated capital markets—with anti-Russian sanctions initiated elsewhere.
In a clear reference to these anti-Russian sanctions, Rousseff concluded: “Unfortunately, for various reasons, things unfolded as they did. Yet now, it seems to me, we have found the right path to putting this injustice right.”
