BRICS Bank provides a non-intrusive lifeline for global South
Agencies New Delhi For decades, developing economies have been tethered to the Bretton Woods institutions – the IMF and the World Bank – for financial assistance. That reliance has...
Developing economies have traditionally depended on the IMF and World Bank for financial support, but these relationships often come with strict conditions and limited fiscal autonomy. The BRICS nations – Brazil, Russia, India, China and South Africa – have emerged as an alternative, with their New Development Bank (NDB) offering loans without heavy conditions.
South Africa, for example, received US$405 million for a new tertiary hospital and US$205 million for a water supply scheme, with terms that included a 10-year maturity and lower interest rates. Egypt also benefited from an NDB loan in 2021, securing US$500 million for infrastructure projects at favourable rates. The NDB aims to reduce dependency on Western-dominated institutions by providing cheaper financing for long-term development projects.
The bank's approach includes a Contingent Reserve Arrangement to help members manage short-term balance of payments pressures, and discussions about de-dollarisation could further diversify funding. While challenges like currency volatility persist, the NDB represents a significant shift in development finance, offering developing nations a more equitable partnership.
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