Development bank head forecasts 'golden decade'

The New Development Bank, the multilateral financial organization that promotes the development of emerging markets and developing countries, is set to enter another golden age as it advances its investment in infrastructure and innovation with China's continued support, said Dilma Rousseff, the bank's president.

She made the comment in an interview after President Xi Jinping's visit to the bank's headquarters in Shanghai on Tuesday.

President Xi defined the NDB's first decade from its establishment in 2014 as "a golden decade", with the bank approving 120 projects and investing $40 billion in that time, according to Rousseff.

Xi suggested that the NDB continue to adhere to the principles that created the bank, which involve investing in the countries of the Global South and the BRICS countries. It should invest in areas, including digital and social infrastructure, that will make a difference in developing countries and emerging economies, said Rousseff, quoting Xi.

The Chinese president underlined the importance of continued investment in innovation and technology, and that the NDB should grow into a modern bank by using all possible digital instruments available, including artificial intelligence and big data.

By keeping the NDB's commitments, as Xi has suggested, the bank will head for "the second golden decade", she added.

"President Xi Jinping is extremely clear about the direction a bank like the NDB should take. This is a bank that was created for and within a multilateral conception... It is the first bank made for the Global South," she said.

The NDB was founded by Brazil, Russia, India, China and South Africa in 2014 with the purpose of mobilizing resources for infrastructure and sustainable development projects in emerging markets and developing countries. It was formally opened in July 2015.

In 2021, the NDB began expanding its membership and admitted Bangladesh, Egypt, the United Arab Emirates and Uruguay as its new member countries.

Rousseff said the NDB is firmly committed to investment in decarbonization, science, technology and innovation, the prevention and mitigation of natural disasters, and fighting climate change.

The NDB is now the world's largest issuer of panda bonds, or yuan-denominated bonds issued by overseas institutions in the Chinese onshore market. It has issued a cumulative 68.5 billion yuan ($9.4 billion) of panda bonds, with the latest issued in early April. The 3-year 7-billion-yuan panda bond received over 9 billion yuan in orders during the bidding process, showing strong investor demand and confidence in the NDB.

Given the current global market volatility, Rousseff expressed to President Xi her great respect for the firm and calm support, as well as the reaffirmation of its own sovereignty that China has shown over this time.

Over the past few years, the NDB has received support from China in all aspects, according to Rousseff. One example is that the renminbi is the bank's second most important currency, while it is increasingly looking to finance in local currencies. At present, the bank has 24 percent of financing in local currencies.

However, the participation of the Chinese system is not limited to local currency. The NDB is also supported to do swaps, or the derivatives that help parties manage risks. Chinese financial institutions have provided guidelines so that the NDB can make its regulatory frameworks more compatible with those in China, she said.

shijing@chinadaily.com.cn