Faith Nyasuguta
Algeria has received approval to join the BRICS New Development Bank (NDB), the bank’s president, Dilma Rousseff, announced over the weekend.
Established in 2015 by the BRICS nations ”Brazil, Russia, India, China, and South Africa, ”the NDB serves as a multilateral development institution aimed at funding infrastructure and sustainable development projects, not only in BRICS countries but also in other emerging economies. The bank welcomed Bangladesh, Egypt, the United Arab Emirates, and Uruguay as new members in 2021.
“We have a process to authorize new members to the bank … Algeria was authorized to become a member,” Rousseff said during the ninth annual meeting of the bank in Cape Town. This decision reflects the BRICS bloc’s growing engagement with Africa, as the bank aims to serve as an alternative to traditional financial institutions like the International Monetary Fund (IMF) and the World Bank.
Recently, South Africa secured financial support from the NDB, highlighting its role in regional development. South Africa’s state-owned logistics company, Transnet, received a loan of 5 billion rand ($283.53 million) from the bank. Additionally, the NDB approved a new loan of up to $1 billion to support water and sanitation projects for lower-income households in South Africa.
With the BRICS summit set for October 2024, there is a noticeable increase in interest from developing countries looking to join the alliance. These countries, spanning regions from Asia and Africa to the global south and even parts of Europe, are keen to secure a place within BRICS, suggesting a shift in global economic dynamics.
The 16th summit, scheduled for Kazan, Russia, is expected to see a surge of applications from countries aspiring to join BRICS in 2024.
India’s Foreign Affairs Minister, S. Jaishankar, recently confirmed this growing interest, revealing that more than 30 countries have expressed a desire to join BRICS. This trend indicates a deepening trust in the alliance and a deliberate move by developing nations to distance themselves from the escalating debt linked to the US dollar, which currently stands at $34 trillion.
The motivation behind this strategic shift lies in a collective effort by developing nations to reduce risks associated with holding large reserves of US dollars. These countries are increasingly prioritizing local currencies in trade to enhance economic resilience and minimize exposure to external financial pressures. Jaishankar highlighted that the interest from 30 countries reflects the perceived value and relevance of the BRICS alliance.
Saudi Arabia’s induction into BRICS earlier this year has further spurred interest from developing countries, encouraging them to consider aligning with the alliance. The burden of debt denominated in US dollars, alongside sanctions imposed by the United States on emerging economies, has pushed these nations to explore alternative economic partnerships.
For many, joining BRICS offers a pathway to diversify economic relationships and foster cooperation among emerging economies. As the global economic landscape undergoes a profound transformation, BRICS is positioning itself as a counterbalance to the dominance of the US dollar.
The alliance aims to replace the existing financial order with a multipolar structure that emphasizes the use of local currencies over the US dollar, signaling a major departure from the traditional, Western-controlled financial systems.
With interest in BRICS surging, developing countries are strategically positioning themselves to navigate the evolving financial landscape of the next decade. BRICS is emerging as a significant player in this global shift, spotlighting local currencies and challenging the established supremacy of the US dollar.
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