Honduras Seeks to Join BRICS Bank Amid China Visit
Honduras has formally requested to join the New Development Bank (NDB) of the BRICS group of major emerging economies. The NDB was established by BRICS member states – Brazil, Russia, India, China, and South Africa – in 2014 to finance infrastructure and sustainable development in member states and other emerging economies. The bank aims to help member states reduce dependence on the US dollar and euro. The NDB has lent $33 billion to support more than 96 projects in the five founding member nations.
Honduras’ President Xiomara Castro met with the bank’s president Dilma Rousseff during her six-day official visit to China. Castro’s office announced the request for admission to the NDB in a tweet late Friday . Castro is the first Honduran president to visit China since the Central American nation established diplomatic ties with Beijing in 2017, severing relations with Taiwan.
Why Honduras Wants to Join the NDB
Honduras is one of the poorest and most indebted countries in Latin America, with a gross domestic product (GDP) of $25.7 billion and a public debt of $12.9 billion as of 2020. The country has been hit hard by the COVID-19 pandemic, natural disasters, political instability, and corruption scandals. Honduras is also dependent on remittances from its citizens living abroad, mainly in the United States, which account for about 20% of its GDP.
By joining the NDB, Honduras hopes to gain access to low-interest loans and grants for its development needs, especially in sectors such as energy, transportation, health, education, and social welfare. Honduras also hopes to diversify its trade and investment partners, as well as strengthen its political and strategic ties with China and other BRICS countries.
What are the Challenges and Opportunities for Honduras
Honduras’ request to join the NDB is not guaranteed to be approved by the bank’s board of governors, which consists of representatives from each of the five founding members. The bank has a policy of expanding its membership gradually and selectively, based on criteria such as economic size, development level, regional balance, and potential contribution to the bank’s objectives. So far, only two non-BRICS countries have joined the NDB: Uruguay and Bangladesh.
Honduras’ request may also face opposition from some of its regional neighbors, especially those that still recognize Taiwan as a sovereign state. Honduras’ decision to switch diplomatic recognition from Taipei to Beijing in 2017 was criticized by some countries as a betrayal of a long-standing ally and a submission to China’s economic influence. Honduras may also face pressure from the United States, which considers China as a strategic rival and has warned its allies against accepting Chinese loans and investments that may compromise their sovereignty and security.
However, Honduras may also find opportunities and benefits from joining the NDB. The bank has a reputation for being more flexible, efficient, and responsive than other multilateral development banks such as the World Bank and the Inter-American Development Bank. The bank also emphasizes cooperation and consultation among its members, respecting their national priorities and preferences. The bank also offers technical assistance and knowledge sharing among its members, fostering innovation and learning.
Moreover, Honduras may be able to leverage its membership in the NDB to enhance its role and voice in regional and global affairs. Honduras may be able to participate in BRICS-led initiatives such as the Belt and Road Initiative (BRI), which aims to connect Asia, Africa, Europe, and Latin America through infrastructure and trade networks. Honduras may also be able to contribute to BRICS-led forums such as the BRICS Summit, which discusses issues such as global governance, climate change, health security, and digital economy.
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