Bangladesh becomes member of New Development Bank

The New Development Bank (NDB), established by BRICS (Brazil, Russia, India, China and South Africa) in 2015, has admitted Bangladesh as a new member.

NDB’s Board of Governors authorised the Bank to conduct formal negotiations with prospective members in late 2020. After a round of successful talks, NDB is increasing its global outreach with the announcement of Bangladesh, the UAE and Uruguay as the first countries admitted into the Bank, said a press release on Thursday.

“We are delighted to welcome the UAE, Uruguay and Bangladesh to the NDB family. New members will have in NDB a platform to foster their cooperation in infrastructure and sustainable development,” said Marcos Troyjo, president of NDB.

“We will continue to expand the Bank’s membership in a gradual and balanced manner.”

“Membership of Bangladesh to NDB has paved way for a new partnership at a momentous time of 50th anniversary of our independence.

Finance Minister AHM Mustafa Kamal said the NDB membership is an important step forward in meeting the development vision of Prime Minister Sheikh Hasina.

“We look forward to working closely with NDB to build together a prosperous and equitable world for our next generation as dreamt by our Father of the Nation Bangabandhu Sheikh Mujibur Rahman,” he added.

Obaid Humaid Al Tayer, minister of state for financial affairs of the UAE, said, “The United Arab Emirates membership in the New Development Bank represents a new step to enhance the role of the UAE economy on the global stage, especially in light of the great capabilities and expertise that the country possesses in supporting infrastructure projects and sustainable development.”

“This monumental step would not have been achieved without the vision and direction of the UAE leadership, who believe in the importance of supporting development projects around the world, especially in emerging economies,” he added.

“Uruguay sees in the NDB a great opportunity to harness cooperation with its member countries, aiming to achieve stronger international integration in trade and cross-border investment flows,” said Azucena Arbeleche, minister of economy and finance of Uruguay.

Once admitted, a country’s membership to NDB becomes effective when it completes its domestic processes and deposits the instrument of accession.

Since its inception, NDB approved about 80 projects in all of its members, totalling a portfolio of $30 billion. Projects in areas such as transport, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development are within the scope of the Bank.

NDB’s membership expansion aligns with the Bank’s strategy to be positioned as the premier development institution for emerging economies.

Coupled with new financing opportunities for long-term finance, becoming a member of NDB will empower Bangladesh to put its opinion in the investment decision for the development of South-South region and enhance its investment capacity.

“Enlistment as a member of NDB will open an option for Bangladesh for long-term financing for infrastructure, especially large projects,” Zahid Hussain, former lead economist of World Bank, Bangladesh told The Business Post.

As assessed by the government, there is a huge demand for funds. Bangladesh gets it from five traditional sources: World Bank, International Momentary Fund, Asian Development Bank, Asian Infrastructural Investment Bank, and Islamic Development Bank. Beyond these, NDB will be another source for fund and it would focus on those, said the economist.

Bangladesh needs a huge amount of funds in attaining the Sustainable Development Goals, especially in energy and eco-friendly projects. As the NDB will focus on those issues, enlistment will yield dividends for us, said Zahid.

However, the benefits will depend on what kind of products it will offer for its members. It is time to observe how much it would be innovative in devising products. AIIB also followed the model of the World Bank, said the economist.

Bangladesh will have to pay about $460 million in subscription fees to be a member of NDB. In becoming eligible to have an initial voting power, Bangladesh has to subscribe 1.85 per cent share. This voting power would dilute to 1.04 per cent once all available authorised capital is subscribed.

“There was a strong need for Bangladesh to increase its presence in global financial structure and bring change to its role,” Khondaker Golam Moazzem, research director at Centre for Policy Dialogue, told The Business Post.

As of now, Bangladesh is at the recipient end in terms of development financing and it will continue. The enlistment will be an opportunity for Bangladesh to show its role and contribution in the development of the South-South region, which we needed, said the economist.

Enlistment as an NDB member will enable Bangladesh to become visible in the global arena as well as in the region. It also showed Bangladesh’s capacity to invest, said Moazzem.

As a NDB board member, Bangladesh will be able to input in investment decisions for regional perspectives, he said.

“From all corners, it carries value for Bangladesh as it opens widow for access to finance. On the other hand, it will help the country attain sustainable development, which is a key focus of the bank,” Ahsan H Mansur, Executive Director of Policy Research Institute, told The Business Post.