- Bangladesh is in the process of formally seeking membership in the BRICS alliance, a significant move to strengthen its standing in the global arena and diversify its economic alliances.
- The New Development Bank (NDB) of the BRICS offers multiple-currency loans, a feature that could help Bangladesh, especially given its ongoing struggle with dollar reserves and exchange rate fluctuations.
In a dynamic and constantly evolving geopolitical landscape, Bangladesh is preparing to play its cards in the global economic poker game by seeking entry into the influential BRICS alliance. This significant step marks an attempt by the nation to further diversify its economic alliances, fortify its global stature, and tap into the potential benefits of aligning with this emerging powerhouse.
BRICS: The New Epicenter of Global Power
Originally established in 2006 as BRIC – Brazil, Russia, India, and China, the group expanded with the induction of South Africa in 2010, transforming into BRICS. Today, the collective represents an unmistakable shift in the balance of global power, as posited by Dr. Salem Nasser, a professor of international law at Brazil’s FGV Direito SP University. He suggests that while joining BRICS doesn’t necessarily equate to aligning with China or isolating Western nations, it indisputably signifies the presence of a new pole of economic and political power, capable of challenging North American hegemony.
The geopolitical tumult dominating the global stage has seemingly made the existing BRICS member nations more open than ever to admitting other countries into their fold. An exemplification of this trend lies in the inclusion of more countries in the BRICS’ New Development Bank (NDB), previously known as the BRICS Development Bank. Bangladesh received this privilege in 2021, and now the nation is setting its sight on a larger goal – a full-fledged BRICS membership.
The NDB Advantage: A Beacon of Hope for Bangladesh?
Bangladesh’s decision to join the BRICS can potentially bring an influx of foreign investments given the elevated status it will gain by aligning with this robust group of developing economies. Moreover, it could also aid the nation in diversifying foreign relations and currency dealings.
The NDB distinguishes itself from institutions like the IMF and the World Bank by offering loans in multiple currencies, not just the dominant US dollar. Under its new leadership, former Brazilian President Dilma Rousseff, the bank is gradually shifting away from the US dollar. She made a commitment that at least 30 percent of future loans would be issued in the local currencies of member countries. This strategy aims to diversify currencies, reduce the bloc’s dollar dependency, and mitigate the adverse impacts of exchange rate fluctuations for developing nations.
For Bangladesh, which has been battling dollar reserve challenges and exchange rate instability, this facility could be an economic windfall. Especially considering that China and India, two BRICS members, account for nearly 40 percent of its imports.
Nonetheless, while the potential benefits of BRICS membership are manifold, they aren’t without strings attached. Should Bangladesh’s membership application be successful, it would entail an increase in the country’s significance and voice on the global stage. Therefore, the nation needs to proactively engage with global issues and contribute towards shaping global agendas.
It is a call for an honest appraisal of whether Bangladesh’s state institutions have reached sufficient maturity to negotiate and fully absorb the potential economic and financial advantages offered by BRICS membership. Given the nation’s past experiences with international negotiations, the road ahead may not be without its hurdles.
The imminent expansion of BRICS into a larger club, teeming with big global players, will necessitate making significant decisions and grappling with substantial challenges. For Bangladesh, it’s a call to action: to strategically position itself so it can handle these challenges deftly and reap the potential rewards of joining this influential alliance.
