Rousseff Lays Out Vision for BRICS New Development Bank: By and For Developing Countries

Here, we present without spin (we include a report on a preposterous New York Times account of the same events—remember they once said the electric light was an impossibility), the exciting outcome of the just concluded BRICS summit in South Africa. Read for yourself about waht truly constitutes a "tectronic shift" in economic relations on this planet. In a separate report, we present excerpts from the Summit's final communique.  You can only get this kind of stuff in oner place, here. If you enjoy important changes, you have some to consider!

Aug. 24, 2023 (EIRNS)—Central to the ability of nations to escape the cycle of endemic poverty, is having credit for productive economic investment. This is what has been controlled and largely restricted by the current, Western-dominated IMF and World Bank, which treat developing countries’ economies as accounting problems to be balanced, lending money with strings attached, and often leaving that nation in worse shape and with more debt than before they took the loan.

Speaking August 23 at the BRICS Summit in South Africa, the New Development Bank’s (NDB) President, Dilma Rousseff, likely caused many within the trans-Atlantic financial establishment to panic. Her remarks clearly indicate that a serious bank, intent on the generation of significant amounts of credit for development, is in the works. As such, she also made a powerful distinction between the NDB and the existing lending institutions: “Our financial support is provided without onerous conditions.”

Though the capital base is small and the bank is only planning to lend $18.2 billion during 2023 and 2024, it is playing an important role in the BRICS process, and was spoken of very highly by leaders throughout the summit. It is also of note that the bank, over the recent period, has struggled with liquidity problems, which have held it back from accomplishing more, including “15 months without carrying out any public issuance of dollar-denominated securities,” due to the Western sanctions against Russia and crushing interest rate hikes. The new addition of more capital-rich UAE and Saudi Arabia into the BRICS and NDB at this week’s summit will surely improve their limited capital base.

Two developments stand out, however, regarding the significance of the NDB as currently headed up by Rousseff. One, it has committed to selling bonds within the local currencies which the bank is operating, allowing it to leverage local capital—including government capital—to support its lending. It has conducted this in China, then recently for the first time in South Africa, and now is beginning the process to do it in Brazil as well.

Second, and most importantly, Rousseff made the point that the NDB is committed to lasting physical investments into developing nations. This is a point she has made several times before, but reiterated in her remarks that “the NDB is a bank created by and for developing countries.” “For developing countries and emerging economies, it is about overcoming the condition of mere suppliers of commodities, considering the immense wealth we have in rare earths and various ores,” she said. “The Global South needs to seek to add value to its wealth and its source of sustainability. It needs to seek reindustrialization with new characteristics.” Rousseff also warned that nations of the Global South cannot become “consumers of ‘high technology platforms’ products, limited, in our economies, to being passive users of digital applications. So we need smart and productive connectivity.” Finally she added: “The NDB does not act alone. We need to work increasingly closely and directly with our member countries to better identify their most significant needs and focus our support on projects that have the greatest additional impact.”