RIYADH: The New Development Bank (NDB), commonly known as the “BRICS bank,” is currently in discussions with Saudi Arabia to welcome Riyadh as its ninth member. This potential accession is expected to bolster the NDB’s funding capabilities, especially in the face of the ongoing Russia-Ukraine conflict, according to media reports.
The NDB, established in 2015 to support infrastructure and sustainable development projects in the BRICS countries and other emerging economies, is now exploring the possibility of adding Saudi Arabia to its list of members. In a statement reported by the Financial Times, the NDB expressed the significance it attaches to the Kingdom of Saudi Arabia and confirmed its active engagement in a qualified dialogue with the nation.
The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, accounts for 25% of global GDP. The group serves as the founding members of the NDB, while the UAE, Uruguay, Bangladesh, and Egypt were the first batch of new members to join.
With the NDB having approved over 90 projects and providing loans totaling US$32 billion as of October 2022, experts highlight that Saudi Arabia’s potential inclusion in the bank would further enhance the BRICS nations’ ability to manage risks amid the ongoing global trend of de-dollarization.
NDB’s Role in Preventing Financial Crises in BRICS Countries
The NDB plays a crucial role in preventing financial crises in BRICS countries and is anticipated to become more efficient in offering crisis assistance. Pan Helin, joint director of the Research Center for Digital Economics and Financial Innovation affiliated with Zhejiang University’s Business School, asserted that Saudi Arabia’s stable financial condition and relatively low risk potential make it an ideal candidate for joining the NDB. Its membership would reinforce the financial strength of the BRICS fund pool and elevate the nations’ capacity for crisis management and response.
Notably, the latest yield on NDB bonds stands at 5.1%, surpassing the likes of the World Bank by 100 basis points, as reported by Modern Diplomacy. Analysts suggest that Saudi Arabia’s inclusion in the NDB would accelerate the nation’s economic diversification and development, reducing its reliance on Western blocs.
Reports indicate that Saudi Arabia has been actively seeking to join the BRICS bloc, and this matter is expected to be discussed by the members during the upcoming summit in August. Zhu Jie, a professor at Fudan University, commented that Saudi Arabia could initiate its membership application process with the NDB before considering full membership in the BRICS bloc. The NDB has shown a strong willingness to expand its membership, and the conditions for Saudi Arabia’s inclusion appear relatively favorable, as stated in media reports.
