MercoPress. South Atlantic News Agency

Lula highlights BRICS Bank's social role

The IMF is “asphyxiating” Argentina, Lula also said

Brazilian President Luiz Inácio Lula da Silva Thursday highlighted the social mission of the New Development Bank (NDB), also known as BRICS Bank, during Dilma Rousseff's inauguration as president of the financial institution in Shanghai, China.

Lula was also critical of the traditional financing model of international financial institutions and highlighted the fact that the NDB did not include the participation of the International Monetary Fund (IMF) and focused rather on BRICS member countries, namely Brazil, Russia, India, China, and South Africa.

“For the first time, a development bank of global reach is established without the participation of developed countries in its initial phase. Free, therefore, from the chains and conditionalities imposed by traditional institutions on emerging economies. And more, with the possibility of financing projects in local currency,” Lula argued while underscoring the NDB's role as an instrument to fight inequality and help those most affected by climate and economic issues through their economic recovery.

“Climate change, [the Covid-19] pandemic, and armed conflict negatively impact the most vulnerable populations. Many developing countries accumulate unpayable debt. It is in this context that the creation of the NDB is necessary,” Lula insisted.

Lula also accused the IMF of “asphyxiating” Argentina. In his view, the banks should have “patience” and keep in mind the word “tolerance” when renewing their financing agreements.

“No ruler can work with a knife at his throat because he owes,” he said. “It's not up to a bank to suffocate the economies of countries, as the International Monetary Fund is doing with Argentina,” Lula pointed out.

“We cannot have a society without solidarity, without feeling. We have to go back to being generous. We are going to have to learn to reach out again. We need to defeat the individualism that is taking over humanity,” he added.

In her inauguration speech, Rousseff also underlined the bank's mission of helping the poorest communities secure housing in more dignified conditions. She also for “common prosperity” for all.

“Taking over the chairmanship of the NDB is an opportunity to do more for the BRICS countries, but also for emerging and developing countries,” she said. “I am confident that together we can realize our development vision. We want prosperity to be common to all countries,” she added.

According to experts interviewed by Agência Brasil, Rousseff will have the opportunity to expand the institution's international insertion but will face two major challenges: boosting projects related to the environment and dribbling the geopolitical impact of Western retaliations against Russia, one of the founding partners.

Created in December 2014 to expand financing for infrastructure and sustainable development projects in the BRICS and other emerging economies, the NDB currently has about US$ 32 billion in approved projects.

In 2021, the following countries joined the Brics Bank: Bangladesh, Egypt, United Arab Emirates, and Uruguay.

(Source: Agencia Brasil)