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London and Wall Street Worry About BRICS Bank

May 28, 2023, 2022 (EIRNS)—Saudi Arabia is interested in joining the BRICS’ New Development Bank, the Financial Times reported today. “In the Middle East, we attach great importance to the Kingdom of Saudi Arabia and are currently engaged in a qualified dialogue with them,” the NDB informed the City of London daily in a statement. Saudi Arabia has reportedly also filed to join the BRICS itself, and as the Financial Times reminds unhappily, “is also pursuing closer relations with China.”

The NDB was founded in 2015 by the five BRICS nations: Brazil, Russia, India, China and South Africa. Three other countries—Bangladesh, U.A.E. and Egypt—have since joined the bank; Uruguay’s membership has been approved, but its entry awaits it filing the required document. The Finance Ministers of member countries, who make up the NDB’s Board of Governors, will meet for their annual meeting this Tuesday and Wednesday (May 30-31) at the bank’s headquarters in Shanghai.

The issue on the table is how the NDB can play an active role in shaping the new international financial system required to replace the collapsing Wall Street-London system of speculation, sanctions, and deindustrialization. Until now, the NDB has been dependent on dollar-financing for its capital and constrained by limiting itself to issuing dollar-denominated loans to member nations. As a result, NDB funding for any new projects in Russia, for example, has been frozen since Western sanctions were imposed on that country, a situation raised by Russian Prime Minister Mikhail Mishustin when he met on May 23 with the NDB’s new president, Dilma Rousseff.

London is also unhappy that the NDB Board is set to discuss Brazilian President Lula da Silva’s request that the bank find ways to aid Argentina, which has applied for full membership in the BRICS, “remove the IMF’s knife off its neck.” At the end of last week, the Brazilian daily O Globo reported with satisfaction that Brazilian Finance Minister Fernando Haddad, who was to play a leading role in those discussions, will not be able to attend in person, although he may attend virtually. The reason: The government is in a hard fight with Congress to pass important economic domestic legislation, and Haddad is the man handling those negotiations.

Besides trying to pin him down at home, London is warning Lula directly to not come to Argentina’s aid. O Estado de São Paulo, a leading mouthpiece for Wall Street and London in Brazil, published a broadside on May 25 threatening to unleash “a devastating domestic effect” if NDB member countries were to grant guarantees for Argentina’s foreign trade with Brazilian companies, as Lula is proposing. O Estado asserted, citing no sources, that Lula’s proposal for the NDB to issue liquidity loans faces “strong resistance” from others within the bank, and it is not likely to be accepted. If Argentina gets help, India could request the same for Sri Lanka, South Africa for Zimbabwe, etc.

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