Prabowo Subianto (right) with Dilma Vana Rousseff (left) at a press conference at Istana Merdeka, Jakarta. - Kantor Staff Presiden
JAKARTA: Indonesia has decided to come on board the BRICS-sponsored multilateral development bank, which President Prabowo Subianto believes could help the country expedite its economic development.
The decision came after Prabowo held a meeting with New Development Bank (NDB) president Dilma Vana Rousseff at the State Palace in Jakarta on Tuesday (March 25), in which the two talked about the short-, medium- and long-term plans alongside the government's programmes.
“I have decided to join the New Development Bank and follow its procedures and requests summoned upon us,” Prabowo was quoted as saying in a press statement released on the same day.
The bank was established in 2015 by the original five BRICS members that make up the organisation's acronym, namely Brazil, Russia, India, China and South Africa.
“Thank you for asking us to join the NDB. I think the NDB can become a strong booster to accelerate our [economic] transformation strategy,” said Prabowo. Rousseff welcomed Jakarta’s decision and said that getting Indonesia on board was among the NDB’s priorities due to its regional influence, according to the same statement.
The NDB brought Bangladesh, United Arab Emirates and Egypt into its fold in 2021. The body also admitted Uruguay as a prospective member in the same year and its website said the country will officially become a member once it deposits the instrument of accession.
The website detailed that the NDB has an initial capital of US$100 billion divided into one million shares. Each of the original five members holds 18.98 per cent of the shares, while the other three hold on to 1 to 2.3 per cent.
“The NDB strives to maintain a consistent presence in key funding markets and establish a curve through regular benchmark issuances in both major hard currencies, as well as local currencies in BRICS and other member countries,” reads a page on the NDB’s website.
The development bank is also seeking to issue green, social and sustainability debt instruments by 2030. The development bank has approved a total of US$39 billion in financing spread over 120 projects in the original five countries, the largest portion of which went to China with US$8.1 billion, followed by India, South Africa, Brazil and Russia in that order.
Responsible for about half of the entire money it rolled out, the bank has provided financing for transportation infrastructure, excluding COVID-19 emergency assistance.
Economist Arif Budimanta wrote in an analysis on Tuesday that the NDB made it mandatory that the original five members should hold at least 55 per cent of the bank’s shares. “With a capital of US$100 billion, the NDB hopes to shift the landscape of financing demands on sustainable development and infrastructure, especially for South-South [countries],” said Arif.
He went on to say that Indonesia’s prospect came with an effect that it had to deposit a sum of capital and pay membership fees. Indonesia’s membership “ought to be followed” with a pipeline of sustainable projects it plans to propose to the NDB, said Arif.
He went on to say that Indonesia’s prospect came with an effect that it had to deposit a sum of capital and pay membership fees. Indonesia’s membership “ought to be followed” with a pipeline of sustainable projects it plans to propose to the NDB, said Arif.
South-East Asia’s largest economy obtained full BRICS membership in January, early in Prabowo’s presidency, following Jakarta’s original request to join BRICS in 2023. - The Jakarta Post/ANN
