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This article appears in the April 28, 2023 issue of Executive Intelligence Review.

[Print version of this article]

Lula: The BRICS New Development Bank Can Become the Great Bank of the Global South

Excerpts from the speech given by Brazilian President Lula da Silva in Shanghai, April 13, 2023 at the investiture ceremony of former Brazilian President Dilma Rousseff as President of the New Development Bank (NDB), the multi-national bank established in 2015 by the BRICS.

The decision to create this bank was a milestone in the joint action of emerging countries. Given their size, the size of their populations, the weight of their economies, and the influence they exert in their regions and in the world, Brazil, Russia, India, China, and South Africa could not remain oblivious to major international issues.

The unmet financing needs of developing countries were and remain enormous….

For the first time, a development bank with global reach is established without the participation of developed countries in its initial phase. Free, therefore, from the shackles of conditionalities imposed by traditional institutions on emerging economies. And more: with the possibility of financing projects in local currency.

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New Development Bank (BRICS Bank) headquarters, Shanghai China.

The creation of this Bank shows that the unity of emerging countries is capable of generating relevant social and economic changes for the world. We do not want to be better than anyone else. We want the opportunity to expand our potential, and to guarantee dignity, citizenship, and quality of life for our people.

Therefore, besides continuing to work for the effective reform of the UN, the IMF, and the World Bank, and for changing the trade rules, we need to creatively use the G20 (which Brazil will chair in 2024) and the BRICS (which we will lead in 2025) in order to reinforce the priority themes for the developing world in the international agenda.

The New Development Bank has great transformative potential, as it frees emerging countries from submission to traditional financial institutions, which want to govern us, without having a mandate to do so.

The BRICS bank has already attracted four new members: Bangladesh, Egypt, the United Arab Emirates, and Uruguay. Several others are in the process of joining, and I am sure that the arrival of President Dilma will contribute to this process….

For all these reasons, the New Development Bank meets all the conditions to become the great bank of the Global South….

It is intolerable, that on a planet that produces enough food to meet the needs of all humanity, hundreds of millions of men, women, and children have nothing to eat. It is inadmissible that the irresponsibility and greed of a small minority endanger the survival of the planet and of all humanity.

In remarks to a big roundtable meeting with officials of the BRICS’ New Development Bank after the investiture ceremony of Dilma Rousseff as its new President, Brazilian President Lula da Silva stated:

Every night I ask myself why all countries have to base their trade on the dollar. Why can’t we do trade based on our own currencies? Who was it that decided that the dollar was the currency after the disappearance of the gold standard? ...

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PR/Ricardo Stuckert
Dilma Rousseff, former President of Brazil (2011-2016), speaks at her inauguration ceremony as the new President of the BRICS’ New Development Bank, Shanghai, April 13, 2023.

No bank should be asphyxiating countries’ economies the way the IMF is doing now with Argentina, or the way they did with Brazil for a long time, and every third-world country. No leader can work with a knife to their throat because [their country] owes money. The banks have to be patient and, if necessary, renew the agreements. The IMF or any other bank, when it lends to a Third World country, the people feel that they have the right to rule, to manage their country’s account. As if the countries became hostages of the one that lent them the money….

I think that, never more than today has the world needed an instrument to help development in the world … [The 2008 financial crisis was because bankers had] no concern for production [or] any product. Everything was sales of paper, exchanging paper, without producing anything … And now we are seeing banks … beginning to go bankrupt again….

No one believed that Credit Suisse would go bankrupt the way it did recently, such that Switzerland had to put 8% of its GNP in to save the bank. Therefore, a bank like this one [the NDB] is … an extraordinary hope in the eyes of its partner countries, in the eyes of the countries which will need to have a relationship with this bank.…

Why can’t a bank like the BRICS bank have a currency to finance trade between Brazil and China, between Brazil and other BRICS countries? Today, countries have to chase after dollars to export, when they could be exporting in their own currencies.

It is difficult because there are people who are ill-accustomed to the fact that everyone depends on a single currency. I think that the 21st Century can change our minds and can help us, who knows, to do things differently.

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