New Delhi, Nov 22 Pakistan’s weak economy, political instability and heavy dependence on Western financing would make it a poor fit for membership in the New Development Bank (NDB), a report has said.
A report from Star Saturday also said that the India-Pakistan conflict is like the cherry on top, further reducing the trust in its viability and efficacy as a member of NDB.
The critics are of the view that Beijing might not lobby aggressively for Pakistan, as the BRICS members might worry that Islamabad will turn into a liability due to its domestic disruptions, the report said.
Analysts said that Pakistan would gain access to the BRICS’s Contingent Reserve Arrangement (CRA) and exploit the comparatively lenient loan conditions of NDB it becomes a member.
The easy access to loans without a stringent control regime, like IMF, will disincentivise Pakistan to achieve any political or economic stability.
Currently, there is no strong proof that IMF bailouts are being used effectively to improve the economic problems of Pakistan. Thus, BRICS will invite a free rider problem in its portfolio, with a huge liability, a moral hazard problem.
Resultantly BRICS will lose its credibility and efficacy in the eyes of the prospective members and skeptics, thereby negatively impacting its expansion, the report said.
With 5 founding members, and the addition of 4 new members, the New Development Bank has been working towards mobilising resources for infrastructure and sustainable development projects in emerging markets and developing countries (EMDCs) for the last decade.
The NDB has raised billions of dollars in bond issuances in China and other markets and approved $39 billion in total project financing till 2024.
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