Русский
Sergey Ryabkov, Russia’s Deputy Foreign Minister has said that Iran would benefit if it joined New Development Bank established by the BRICS countries. Speaking at the BRICS foreign ministers meeting in Nizhny Novgorod, he said that “In order for Iran’s entry into BRICS to face the least difficulties, it is necessary to take a number of measures, including the issue of Iran’s membership in the New Development Bank. The New Development Bank finances infrastructure projects at reasonable interest rates. I am confident that over time Iran would derive practical benefits from this.”
The New Development Bank was established by Brazil, Russia, India, China and South Africa on the basis of an intergovernmental agreement in 2014. The bank’s goal is to mobilize resources for the implementation of investment projects in the BRICS countries and developing countries. Over the years of its operation, the bank has approved more than 90 projects for a total of US$32 billion.
Bangladesh, the UAE and Uruguay joined as shareholders last year. Any decision on Iranian membership of the NDB will not take place until later in the year, following local elections to be held in the country after the recent death of President Raisi.
Iran has a population of 90 million, and despite Western sanctions, has a GDP (PPP) of US$1.85 trillion, making it the worlds 17th largest economy. It is a gateway between the Global North and Global South through the North-South Transportation Corridor which runs from Russia to India, bisecting Iran from its Caspian Sea to its Persian Gulf Ports. It needs infrastructure funding to speed up the progress of some of its infrastructure capacity requirements.
Sanctions Issues
Iran is also sanctioned and has largely been cut off from Western finance and development. Although the NDB could also face sanctions if it engaged in financial support and loans for either Russia or Iran, the bank also has no connections with the West, meaning any damage would be minimal. Sanctioning well regarded international bankers such as the NDB bank Chairman, Dilma Rousseff, would also be seen as an unnecessarily antagonistic move and would seriously damage US diplomatic relations with Brazil. Rousseff is a Brazilian economist and politician who has been the Chair of the NDB since March 2023. Previously, she served as the 36th president of Brazil from 2011 to 2016, and was the first woman to have held the Brazilian presidency. She also served as the chief of staff to former and current president Luiz Inácio Lula da Silva from 2005 to 2010. Sanctioning her would create shock waves throughout the global banking community and lead to increasing concerns about US behaviour.
Further Reading
Russia-Iran 2024 Trade & Development
Our 2024 Russia’s Pivot To Asia Guide features comprehensive discussions on Russia’s relationship with Iran. It is a complimentary download and can be accessed in English here and Russian here.
