The Roscongress Foundation, a Russian think tank, has profiled the New Development Bank, known as the BRICS bank, as an alternative to the International Monetary Fund (IMF) in its latest “Decolonization in Energy Markets” report. Nation members could secure loans according to their energy-exporting capabilities, which would be liquid, and similar to the Special Drawing Rights (SDR) asset.
Roscongress Proposes BRICS Bank to Act as IMF Alternative
Ronscongress Foundation, one of the more proficient Russian think tanks, has presented the idea of profiling the New Development Bank, likewise known as the BRICS bank, as a potential counterpart for traditional world financial institutions, such as the International Monetary Fund (IMF).
In its latest report about the de-dollarization of energy markets, Rosscongress profiles the New Development Bank as a credit institution between BRICS bloc members, having access to loans depending on its energy-exporting capabilities. The report states:
Energy-exporting countries could borrow these funds for the projects they must, allowing them to increase trade in their national currencies regardless of trade imbalances. The New Development Bank could serve as a platform for securing such energy loans.
Furthermore, these “energy loans,” similar to the IMF’s Special Drawing Rights (SDR), an international reserve investment, would be liquid and convertible owing to their multicurrency nature. The future inclusion of more countries to the BRICS bloc would increase the volume of trade of these tools, the report suggests.
A Shift to an Alternative Financial System
The proposition is being discussed in Russian circles, with specialists pondering it as a natural alternative to the present United States dollar-dominated financial system, which has allowed the enactment of unilateral sanctions against countries like China and Russia with economic sanctions. This is the opinion of Sergey Chevrychkin, a Russian financial analyst, who believes the world will flee to these alternatives owing to fear of likewise facing these unilateral measures.
I believe that in the long run, these measures will destroy faith in the transnational protection of property rights and weaponize the worldwide financial system.
Chevrychkin states that the future growth of the economies in the BRICS bloc, which is poised to surpass the aggregate share of the Group of the 7 (G7) countries in world economic growth by 2028, guarantees the establishment of a worldwide financial institution for its nation countries.
The establishment of a BRICS bloc-wide currency would be another factor that would accelerate this shift. The issuance of such a currency will be discussed in the following BRICS summit to be held in South Africa in August.