This article was originally published by Insider Paper.
Saudi Arabia reportedly in talks to join BRICS bank to improve financial capabilities amid de-dollarization efforts
This move is seen as a means to bolster the NDB’s funding options in the face of the Russia-Ukraine conflict. According to the report, the NDB expressed its recognition of the Kingdom of Saudi Arabia’s importance in the Middle East and confirmed ongoing constructive discussions with the country.
Established in 2015, the NDB’s primary objective, as stated by China’s Foreign Ministry, is to mobilize resources to support infrastructure and sustainable development projects in the BRICS nations and other emerging economies.
The BRICS countries, which include Brazil, Russia, India, China, and South Africa, collectively account for 25 percent of global GDP. These nations are the founding members of the New Development Bank (NDB). Additionally, the NDB has welcomed new members such as the UAE, Uruguay, Bangladesh, and Egypt in its initial batch.
Since its establishment, the NDB has approved over 90 projects, amounting to loans totaling $32 billion, as reported by yicai.com in October 2022. Experts believe that Saudi Arabia‘s potential accession to the NDB will further strengthen the ability of the BRICS nations to mitigate risks in the face of the widespread global de-dollarization trend.
Experts emphasize NDB’s role in crisis prevention and Saudi Arabia’s potential contribution
Pan Helin, the joint director of the Research Center for Digital Economics and Financial Innovation at Zhejiang University’s International Business School, said that the NDB plays a crucial role in averting financial crises within the BRICS countries and will be more effective in providing assistance during times of crisis.
According to Pan, the financial condition of Saudi Arabia is stable, and it poses a relatively low risk potential. Therefore, its membership in the NDB would strengthen the financial robustness of the BRICS fund pool and enhance the ability of the member nations to manage and respond to crises.
Amid the ongoing dollar crisis, some developing economies are growing skeptical of the US dollar and de-dollarization is becoming a consensus among these countries. Dong Dengxin, the director of the Finance and Securities Institute at Wuhan University of Science and Technology, mentioned that these economies are actively seeking alternatives to the US dollar.