The New Development Bank (NDB) plays a key role in providing BRICS members as well as other emerging markets and developing countries with easier access to financing, helping support their development and economic recovery, according to a Chinese economic researcher.
Established in 2015 by BRICS countries and headquartered in Shanghai, the NDB is a multilateral development bank aimed at mobilizing resources for infrastructure and sustainable development projects, complementing the existing efforts of multilateral and regional financial institutions to push forward global growth and development.
A key priority for the bank is to increase local-currency financings, an issue which has become prevalent as more countries join the BRICS organization, with the ongoing 16th BRICS Summit which got underway in Russia's Kazan on Tuesday likely to see related discussions.
Liu Zhiqin, a senior fellow of the Chongyang Institute for Financial Studies at Renmin University, elaborated on this in an interview with China Global Television Network (CGTN) on Wednesday.
"I think this priority is very important for the BRICS countries, because as we know, all these countries are facing one important question, (which) is how to make our local currency more stronger, and their presence in the world, especially in the international trade business. So local currency can be now strengthened through this policy in order to get more say in international affairs," he said.
Using local currencies in investment projects can stabilize countries' financial sectors and could also be safer, more effective and more sustainable, Liu added.
Meanwhile, the NDB has also said it plans to accelerate support for non-sovereign operations, such as public-private partnerships and foreign investment projects. Liu believes this concept offers more practical and sustainable options for developing countries to pursue economic growth.
"[Regarding] sovereign financing or non-sovereign financing, the biggest difference is that all the projects [that] belong to sovereign financing need the state as credibility, as a guarantor. For now, sovereign projects, I think, it could be easier and more comfortable for project managers than to execute and operate all these projects through normal commercial financing procedures," he said.
Looking from a broader perspective, Liu also outlined the significant role the NDB plays in helping countries in the Global South mitigate difficulties and challenges caused by chronic funding shortages.
"The Global South countries have a very large population and also have a big account in international trade. But they're facing a very important, difficult problem. That is the shortage of effectiveness or effective international financing. So, in this way, the NDB developed this policy to support the Global South in order to have more chances and opportunities, especially the equal opportunities for all countries to get financing for their development and economic recovery," Liu said.
BRICS is the acronym for an emerging-market cooperative mechanism that initially comprised Brazil, Russia, India, China and South Africa, but has now evolved into an influential international cooperation mechanism with an expanded membership.
Other than the countries that officially joined BRICS in January, over 30 countries including Thailand, Malaysia, Türkiye and Azerbaijan have either formally applied for or expressed interest in membership.
NDB helps facilitate key financing for developing countries: Chinese researcher
