Dilma in China: what is the Bank of Brics? – 03/24/2023 – Market

Created in 2015, the New Development Bank (NDB), also known as Banco do Brics, has become a colossus with more than US$30 billion in loans approved by 2021.

Created to be an alternative to traditional sources of financing, the bank announced this Friday (24) the election of former Brazilian president Dilma Rousseff (PT) as the bank’s new president. In office, Dilma will earn a salary of approximately R$ 290,000 per month.

But what is the Brics Bank?

The bank was created in 2015 by members of the group called Brics, made up of Brazil, Russia, India, China and South Africa. The creation of the bank, however, had been discussed since at least 2012, when Dilma was still president of Brazil.

At the time, the countries were known as emerging economies and were looking for alternatives for financing infrastructure projects outside the conventional circle made up of organizations such as the International Monetary Fund (IMF) and the World Bank.

The bank’s initial capital was made up of contributions made by the bank’s member countries. Its head office is located in the Chinese city of Shanghai.

As of 2016, the bank began a process of expanding its membership. Currently, in addition to the Brics, the United Arab Emirates, Bangladesh and Egypt are also part of the institution. Uruguay’s accession is also under analysis.

The organization is commanded by a group of executives appointed by each of the member countries and the presidency has been of the rotating type — that is, every five years, a country indicates a new name to command the institution.

Dilma replaces another Brazilian, diplomat Marcos Troyjo, who had been appointed in 2020 by the then Minister of Economy of Brazil Paulo Guedes. His term runs until 2025.

According to the bank’s investor reports, the BRICS Bank currently has a total of US$ 30 billion in approved financing since its creation. Of this total, US$ 14.6 billion have already been disbursed.

Brazil has already had projects worth US$ 5 billion approved. Among them are projects such as the expansion of the water and sewage network in Pernambuco, works for urban mobility in Sorocaba (SP) and improvements in the urban transport system in Curitiba.

China and India lead the ranking of approvals with US$ 7.4 billion and US$ 7 billion in approved projects, respectively.

The bank’s main area of ​​activity is the financing of projects focused on infrastructure works, sanitation, clean energy and energy efficiency, digital and social infrastructure.

How did Dilma arrive at the presidency of the bank?

Dilma’s arrival at the presidency of Banco do Brics was articulated by the government of President Luiz Inácio Lula da Silva (PT).

According to the rotation rule, the presidency of the body should be with a nominee by Brazil until 2025, but as Troyjo had been a name appointed by the previous government, the consensus was that Lula could nominate a new name.

Marcos Troyjo announced, in early March, that he would resign from office, paving the way for Dilma to be nominated for president.

In the election that defined Dilma as the new president of the bank, there was no other candidacy.

The political future had been debated by her and other members of Lula’s circle since the PT won the elections.

There was speculation that she might take over an embassy, ​​but there were fears that her name might face resistance during the Saturday and Senate vote needed to seal the presidential nomination.

In an interview with CNN Brasil, in February this year, Lula openly defended Dilma’s decision to head the bank.

“If she becomes president of the Brics bank, it will be a wonderful thing for the Brics, you know, it will be a wonderful thing for Brazil”, he said.

The opposition to the government, however, criticized the nomination.

The former Minister of the Civil House of Jair Bolsonaro (PL), Senator Ciro Nogueira (PP-PI), questioned, on his social networks, the name of the former president.

“Would you hand over a bank for Dilma to manage? Even more so if you were from Brazil, Russia, India, China and South Africa? On the eve of leaving for the US, they can only be declaring war on the Brics. .” he said in a Twitter post.

Dilma Rousseff was a minister in the first two governments of President Lula. In 2010, with support from the PT, she was elected the first woman president of Brazil. In 2014, she was re-elected, beating then Senator Aécio Neves (PSDB).

Two years later, in 2016, pressured by an economic crisis and the investigations of Operation Lava Jato, Dilma was removed from the presidency during an impeachment process. She was the second president of the Republic in Brazil removed by impeachment. The first was former president Fernando Collor de Mello (PTB).

The announcement of the approval of Dilma’s name to preside over the Banco do Brics takes place on the eve of Lula’s trip to China, scheduled to start this Sunday (26). Lula will go to Beijing and Shanghai. In the Asian country, he should meet Chinese President Xi Jinping.

This text was originally published here.