Lula: The NDB has potential as it frees emerging economies from submission to traditional financial institutions. — Reuters
SHANGHAI: The role of the New Development Bank (NDB) shows that the union of emerging economies is capable of triggering social and economic changes relevant to the world while promising great potential, says Brazilian President Luiz Inacio Lula da Silva.
Lula, who started his four-day state visit to China last Wednesday, made the remark at the inauguration ceremony for the newly elected president of the NDB, Dilma Vana Rousseff, who will be in office till 2025.
Headquartered in Shanghai, the NDB was founded by Brazil, Russia, India, China and South Africa (BRICS) in 2014.
The bank formally opened in July 2015 with the objective to support infrastructure and sustainable development projects in emerging markets and developing countries.
The NDB has great potential as “it frees emerging economies from submission to traditional financial institutions”, Lula said.
Since its establishment, the NDB has approved over US$33.2bil (RM146bil) in loans for 98 projects in developing countries.
Aside from the five BRICS nations, the bank has included Bangladesh, the United Arab Emirates, Egypt and Uruguay to its list of members over the past few years, according to the NDB.
During a media interview last Thursday, Rousseff, a former Brazilian president, echoed Lula by saying that the NDB is different from other financial institutions – most of which were established by developed economies – because it focuses on developing countries, and aims to eradicate poverty and facilitate industrialisation.
The NDB is also deeply committed to addressing the challenges brought by climate change, which developing countries are more vulnerable to, she said.
The bank will make due efforts to help with currency stability among its members, which is crucial to economic development and is particularly important when major economies are grappling with soaring inflation and credit risks, according to Rousseff.
Using one single currency for foreign exchange settlement, for example the US dollar at present, entails high risks. The NDB, therefore, plans to use local currencies for 30% of its financing provided to emerging economies, she said.
Rousseff became Brazil’s first female president in 2011 and was reelected in 2014. In July that year, she participated in the creation of the NDB and the contingent reserve arrangement. She was elected NDB president on March 24 this year.
During her interview last Thursday, Rousseff said that addressing climate change by making more green investment, providing better hygiene, education and living conditions for people in developing countries, facilitating infrastructure projects in emerging economies and advancing technology development among NDB members are high on her agenda.
China will continue to deepen all-around cooperation with the NDB, as the bank is “one of the signature outcomes of the BRICS cooperation”, Foreign Ministry spokeswoman Mao Ning said at a regular news conference on March 30. — China Daily/ANN
