In the recent Russia-Africa Summit held in Saint Petersburg, Russian President Vladimir Putin and Dilma Rousseff, President of the New Development Bank (NDB), engaged in discussions about the challenges faced by the bank in the current international arena. Vladimir Putin expressed concerns over the weaponization of the dollar and its impact on the global economy, which has complicated the NDB’s task of growing and developing its role on the world stage.
Vladimir Putin emphasizes the need to develop the NDB
In the meeting, Vladimir Putin emphasized the need for concerted efforts to develop the NDB amid the evolving landscape of global finance, where the use of the dollar as a political weapon has become prevalent. He noted that the BRICS countries (Brazil, Russia, India, China, and South Africa) have been increasingly utilizing their national currencies in mutual settlements, signaling a potential role for the NDB in facilitating and enhancing such joint activities.
Rousseff, despite acknowledging liquidity problems faced by the NDB, emphasized its pivotal role in contributing to the emerging multipolar world order. She highlighted the importance of attracting investment in the markets of their partner countries, underscoring the NDB’s mission to play a major role in shaping a multipolar, polycentric global landscape. Both leaders shared a vision of promoting the use of national currencies in international trade, especially among developing nations.
Rousseff advocated for more freedom for developing countries to conduct foreign trade transactions using their currencies, thereby reducing reliance on dominant international currencies like the dollar. The Roscongress Foundation, a Russian think tank that sponsors the Russia-Africa Summit, has previously outlined the NDB’s potential as a counterpart to the International Monetary Fund (IMF). In their report published in May, the foundation proposed the issuance of “energy loans” based on each member country’s energy-exporting capabilities.
Promoting national currencies and energy loans
The energy loans would be backed by the NDB’s multi-currency nature, ensuring liquidity akin to the IMF’s Special Drawing Rights (SDR). Looking ahead, the NDB faces challenges and opportunities. As the global economy undergoes significant shifts and power dynamics evolve, the bank must navigate through the complexities brought about by the weaponization of the dollar. It will require strategic and collaborative efforts to develop innovative financial mechanisms that foster economic growth and stability among its member countries.
The utilization of national currencies for mutual settlements among BRICS nations offers a promising avenue for strengthening economic ties and reducing dependency on external monetary instruments. By promoting the use of their currencies, these countries can potentially shield themselves from currency fluctuations and external economic pressures. In fulfilling its envisioned role as a counterbalance to the IMF, the NDB can play a critical role in supporting member countries’ sustainable development projects and infrastructure initiatives.
Vladimir Putin also said that by leveraging its multi-currency nature and exploring the issuance of energy loans, the NDB can bolster investments in the energy sector and foster regional cooperation. Moreover, the NDB’s focus on supporting developing countries aligns with Vladimir Putin’s vision of a more just and democratic multipolar world. By providing financial assistance to these nations, the bank can contribute to leveling the global economic playing field and empowering emerging economies to chart their development trajectories.
As the NDB continues its efforts to expand its influence and relevance in the international financial landscape, collaborative partnerships and strategic alliances with other development institutions will be crucial. By aligning their goals and pooling resources, these institutions can collectively address global challenges, mitigate risks, and promote sustainable economic growth on a global scale.
The discussions between President Vladimir Putin and President Dilma Rousseff at the Russia-Africa Summit underscore the challenges and opportunities facing the New Development Bank in the current global economic landscape. As the bank strives to develop a significant role in a multipolar world, its focus on promoting national currencies in trade, exploring energy loans, and supporting developing nations will play a pivotal role in shaping a more just and democratic global order.
