Bangladesh’s Accession to New Development Bank

Bangladesh has achieved the membership of BRICS New Development Bank (NDB), as the bank is expanding beyond the core members of BRICS (Brazil, Russia, India, China, and South Africa). Against the backdrop of a crippling pandemic, admission to the BRICS is set to herald a new epoch of external financing of the country.

Global finance has been dominated by the western world. In the wake of WW2, the western victors has entrenched their position as the preeminent superpower by their preponderant economic clout. The yearn to establish the supremacy in the financial and economic realm was embodied in the establishment of the Bretton Woods Institutions likes of World Bank, IMF and WTO.

However, these financial organizations was driven by western interests and strived to establish western hegemony and seek to impose the liberal economic norms on other countries. This has taken the form of a slew of stringent conditionalities concomitant with the loans which is exacting on the developing nations. Moreover, the western world seek to reorient the world in the image of western capitalism and liberal ethic and these organizations undergirded by "embedded liberalism" served the role of conveyor belt of the liberalism in the non-western global south countries.
To the dismay of the western countries, the landscape of the world has witnessed a profound change in the previous decades which has been much accentuated in the last decade. While the western world was reeling from the recurring financial recession, the emerging economies has made considerable leap towards achieving considerable financial prowess. These emerging countries are confident to reconfigure the world geopolitical and geo-economic landscape in the forthcoming era.

One of the paramount initiatives undertaken by these countries is the development of the BRICS which constitute a forum for the emerging countries of the world and wield a considerable influence on the prevailing world order. A subsidiary of the organization is the New Development Bank (NDB). As has been mentioned earlier, the loans of the international financial institutions was not conducive and came with an array of intrusive conditions which is adverse to the national sovereignty and incongruent with the development policies of these countries. Therefore, these emerging economies sought new platforms which came to be known as NDB.

The cornerstone of the organization lay in financing infrastructure and sustainable development of the member countries--as bulk of the investments of the bank is cantered around the sustainable financing. Headquartered in Shanghai, the organization accounts for five massive emerging countries (BRICS) with 41% of the world's populations, 22% of the world GDP and one of the largest land masses of the world. According to NDB's General Strategy: 2017 - 2021, NDB is a multilateral development bank "that builds on the experiences of existing institutions to design policies and practices capable of living up to the challenges posed by global trends." Moreover, the Bank emanates from the burgeoning clout of BRICs countries and their resolve in acting independently and without interference in international economic governance and development.

Since its genesis, in 2014, NDB has initiated approximately 80 projects in all of its member countries, amounting to a portfolio of US$ 30 billion in areas such as transport, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development. The disbursement of the huge sum of monetary support has been lauded and earned the Bank AA+ long term credit rating and A-1+ short term credit rating.

Against this backdrop, the Bank has initiated an expansion drive in order to further strengthen its capacity and Bangladesh along with UAE and Uruguay has been admitted to the NDB. Bangladesh has made enormous economic progress in the previous years which has marked by an invariably high growth rate as well as considerable progress on the front of social indicators. Bangladesh has undertaken an array of infrastructure plans and made progress in the realm of infrastructural development.

However, the lack of government adequate revenue mobilization efforts as well as the shrinking of external lending avenues in the wake of LDC graduation has become a cause of consternation of the policy makers. The revenue mobilization by the government remain undoubtedly abysmal as the tax-GDP ratio hovers around 9% being one of the lowest in the South Asian region.

Besides, the financing of sustainable development also appears to be concern for the government as there is a financial pressure in implementing the SDG and other government plans.

It has been projected that Bangladesh requires over $928 billion at 2015-16 prices between 2017-2030, accounting for virtually 20% of GDP. This estimate, however, doesn't take into account the pandemic induced economic disruption. The protracted pandemic is set to exacerbate this more as the country has been reeling from economic crisis which has led the government to disburse several stimuli to the economy. Besides, the graduation from the LDC status is set to shrink the window of grant and concessionary loans from the external financial institutions which will render prevailing financial avenues inadequate.

Against this backdrop, the accession to the New Development Bank (NDB) presents a resounding opportunity for the economy as loans from this platform can be harnessed in financing the infrastructure and will facilitate the achievement of the Sustainable Development Goals (SDGs). Besides, it will fill the vacuum of financial assistance for the country's development plans. Therefore, the access to the NDB will open up new avenues for the country's economy and herald a new dawn for the sustainable financing.
The writer is a student, Department of International Relations, University of Dhaka