Uruguay joins BRICS bank, marking expansion in South America

Uruguay, one of South America’s smaller economies, has become the second country in the region after Brazil to join the New Development Bank (NDB), established by the BRICS nations: Brazil, Russia, India, China, and South Africa.

This move came two years after its 2021 membership acceptance, when the bank also inducted Bangladesh, United Arab Emirates, and Egypt, signaling a global expansion phase.

Prior to its BRICS Bank membership, Montevideo had joined the Asian Infrastructure Investment Bank (AIIB) in May 2020.

Experts suggest that Uruguay is seeking diverse financial alliances beyond traditional institutions like the Inter-American Development Bank and the Latin American Development Bank.

Nastasia Barceló, an international relations specialist, mentioned that countries like Brazil and Argentina are aware of the need for diverse financing sources for sustainable infrastructure projects.

Uruguay’s historical tendency to seek alternative financing has positioned it favorably for such international opportunities.

Both experts agree that Uruguay’s NDB membership expands its financing options.

Unlike other institutions, such as the World Bank or International Monetary Fund, the NDB refrains from intervening in member states’ internal matters.

The political environment has influenced the NDB’s emergence as a viable alternative, with its effectiveness being linked to its funding volume.

To date, the NDB has approved 96 infrastructure projects, totaling over US$32.8 billion.

This inclusion of Uruguay in the NDB indicates the bank’s expanding portfolio, a progression six years in the making.

The bank’s growth correlates with the political priorities of regional countries.

For instance, during Jair Bolsonaro’s tenure in Brazil (2018-2022), BRICS wasn’t emphasized as much as during the administrations of Dilma Rousseff (2011-2016) and Luiz Inacio Lula da Silva (2003-2010).