Pakistan, grappling with an economic crisis, is now exploring new financial avenues on international platforms. In this regard, it has formally sought China's support to join the BRICS-backed New Development Bank (NDB).
Islamabad: Amidst its fragile economic situation and cash crunch, Pakistan has sought support from China to join the BRICS-backed New Development Bank (NDB). The objective of this move is to open new avenues for loans and financial assistance, thereby stabilizing the country's faltering economy. However, Pakistan's efforts may face opposition from India, as India is a key member of the BRICS group and relations between the two countries have been extremely tense in recent months.
If Pakistan gains entry into this bank, it could prove to be a new opportunity for international financial cooperation, but it would also have to navigate geopolitical challenges.
Pakistan's Efforts to Join the BRICS Bank
According to a report by Nikkei Asia, Pakistan applied for NDB membership earlier this year, which is currently under review. The bank was established in 2015 by Brazil, Russia, India, China, and South Africa, with the aim of providing financial assistance to development projects in emerging markets.
According to Pakistan's Ministry of Finance, the country's Finance Minister Muhammad Aurangzeb recently met with China's Vice Finance Minister Liao Min in Beijing. In this meeting, Pakistan formally requested China's support for its membership in the BRICS Bank. Islamabad hopes that with the cooperation of China, often referred to as its "iron brother," it can gain entry into this bank.
India's Opposition Expected, a Major Challenge
For entry into the BRICS Bank (NDB), any new member must secure approval from at least four of the five founding nations. In this scenario, Pakistan would need to gather support from Russia, Brazil, and South Africa, in addition to China. However, India's opposition to this application is almost considered certain. Relations between India and Pakistan have already been highly sensitive due to increased tensions and cross-border terrorist activities in recent months. India has previously opposed Pakistan's participation in any BRICS forum.
Pakistan's economy is currently in a severe crisis. The country has been rattled by a shortage of foreign exchange reserves, rising debt, inflation, and political instability. In such a situation, membership in the BRICS Bank could provide it with new financial support.
Will China Support Pakistan?
China has already invested heavily in Pakistan, particularly under the China-Pakistan Economic Corridor (CPEC). Despite this, several projects have been mired in controversy due to slow progress. Analysts suggest that Pakistan's inclusion in the NDB would also strengthen China's regional strategic interests. Beijing aims to position the BRICS group as an alternative global financial institution that can counterbalance Western-controlled institutions like the IMF and World Bank.
Thus, Pakistan's inclusion could also prove to be a geopolitical advantage for China. The Shanghai-based bank currently has an equal 18.76% stake for each of its five founding member countries. New members include Egypt (2.24%), Bangladesh (1.77%), Algeria (1.15%), and the United Arab Emirates (1.04%).
