UPSC CURRENT AFFAIRS – 23th May 2025

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BRICS bank NDB admits Algeria as new member

Why in News?

Algeria became a full member of the New Development Bank (NDB) in May 2025, enhancing NDB’s outreach into North Africa and the Global South.

Introduction

Recently the New Development Bank (NDB), established by BRICS nations, formally admitted Algeria as a new member, marking a significant expansion of its global membership base.
Algeria deposited its instrument of accession on May 19, 2025, in accordance with the Articles of Agreement of the NDB.

About the New Development Bank (NDB)

Established: 2015
Founding Members: Brazil, Russia, India, China, South Africa (BRICS)
Headquarters: Shanghai, China
Objective: To mobilise resources for infrastructure and sustainable development projects in member countries and other emerging economies.

The bank has approved over 120 investment projects worth $40 billion, covering sectors such as:

Clean energy and energy efficiency
Transport infrastructure
Environmental protection
Water supply and sanitation
Social and digital infrastructure

The presidency and vice-presidency of the NDB are rotated among founding members.

Algeria's Admission and Significance

Algeria:

Plays an important role in the North African economy and the global financial system
Has rich natural resources, a dynamic economy, and a strategic geographic location
Possesses immense growth potential, making it a valuable addition to NDB’s mission

NDB is committed to becoming a trustworthy partner in supporting Algeria’s sustainable development goals.

Algeria's Perspective

The membership reflects Algeria’s confidence in NDB as a key institution in financing global development
It showcases the potential of NDB to offer alternative and innovative solutions for the economic resilience and growth of its member nations

Implications

Strengthening of South-South cooperation: Algeria’s entry enhances the geographical diversity of the NDB, reinforcing its role as a global institution beyond BRICS.
Strategic outreach into Africa: It deepens engagement with African economies, aligning with BRICS’ broader geopolitical and economic objectives.
Alternative to Western-dominated financial systems: The expansion of NDB is seen as part of efforts to provide non-Western development financing models.

Implications of Algeria Joining NDB on India

Strengthening India–Africa Engagement

- Algeria’s entry into the NDB aligns with India’s strategic focus on Africa under initiatives such as the India-Africa Forum Summit and Voice of Global South Summit.
- Enhances India’s outreach in North Africa, a region with rich natural resources and strategic importance for India’s energy security and trade diversification.

Boost to South–South Cooperation

- Reinforces India’s vision of multipolar global financial architecture, offering alternatives to Western-led institutions like the World Bank and IMF.
- India’s leadership in the Global South narrative is strengthened by expansion of multilateral banks like NDB.

Economic and Trade Opportunities

- Algeria’s development needs, particularly in infrastructure, clean energy, and digital sectors, may open new avenues for Indian companies to participate in NDB-funded projects.
- Facilitates greater economic linkages between India and Algeria, potentially increasing trade and investment flows.

Strategic Balancing in BRICS and NDB

- As a founding member, India plays a key role in shaping NDB’s policies. Expansion to include Algeria allows India to promote inclusive development while maintaining strategic influence.
- Helps counterbalance the growing influence of China within BRICS and the NDB framework by diversifying membership and promoting democratic multilateralism.

Energy Security and Resource Access

- Algeria, a major producer of oil and natural gas, can become a strategic partner in India’s energy diversification strategy.
- NDB-backed cooperation in the energy sector could strengthen India’s access to cleaner and affordable energy sources.

Enhanced Development Financing Options

- Algeria’s inclusion adds to the financial and political strength of NDB, which can mobilize more capital for projects in India and other developing nations.
- Strengthens NDB’s balance sheet and global reach, allowing it to become a more competitive source of infrastructure finance compared to institutions like the ADB or AIIB.

Conclusion

The inclusion of Algeria in the NDB signals the bank’s growing global relevance and commitment to inclusive, sustainable development. As the geopolitical landscape evolves, such institutions represent important platforms for multilateral collaboration, particularly for the Global South.