Jayanty Nada Shofa, Jakarta – Indonesia has to put a sum of money in the BRICS-backed New Development Bank or NDB if it wishes to become a member, according to a senior minister.
President Prabowo Subianto recently unveiled his intentions for Indonesia to secure a seat at the NDB. The announcement came about three months after Indonesia officially joined BRICS, a group of emerging economies whose founding members formed the NDB in mid-2014.
Prabowo also told NDB's boss Dilma Rousseff, who was in Jakarta earlier this week, that Indonesia would follow the membership requirements. Although the bank is set to open up new sources of funding for Indonesia, the NDB requires Jakarta to also make some financial contributions.
"Joining the NDB has its own 'formula'. They have asked us to invest some money [in the bank]," Chief Economic Affairs Minister Airlangga Hartarto recently told the press at the presidential palace in Jakarta.
Airlangga did not say how much Indonesia would have to give to the multilateral development bank.
However, NDB boasts a $100 billion initial authorized capital, which the bank divides into one million shares with a par value of $100,000 each. The five original NDB members – Brazil, Russia, India, China, South Africa – initially subscribed 500,000 shares totaling $50 billion. This includes a $10 billion paid-in capital and $40 billion callable capital, according to the bank's official website. All five currently hold 18.98 percent of the shares, respectively.
NDB later expanded with Bangladesh, Egypt, and the United Arab Emirates (UAE). The paid-in capital payments may come in seven installments. The bank reported that Bangladesh and the UAE had fully paid up to their third installments. Egypt had only paid off the first installment of the paid-in capital. Uruguay's current status is still that of a prospective member.
To date, NDB has greenlit $39 billion in financing for 120 projects, although the loans had only flowed into the five founding members. The projects revolve around transport infrastructure, clean energy, sanitation systems, among others. The UAE is the only member to not have borrowed any money from the bank. Egypt and Bangladesh had requested for some loans, but were still waiting for NDB's approval.
Early this year, BRICS brought Indonesia into its fold, making Jakarta the first ASEAN economy to be accepted into the club that is known as a counterweight to the West. BRICS started out with Brazil, Russia, India, China, and South Africa. Aside from the original five, BRICS also encompasses Egypt, Ethiopia, Iran, and the UAE.