Zimbabwe has expressed its eager interest in joining the BRICS Alliance’s bank, the New Development Bank (NDB). However, the permanent members of the Alliance do not seem very confident in Zimbabwe’s potential membership in the bloc. And this lack of confidence in Zimbabwe’s potential membership is based on its historical record in economic mismanagement, which could compromise BRICS’s de-dollarization strategy.
BRICS's messaging about de-dollarization could get even messier if Zimbabwe joins the group's bank. Zimbabwe has a history of economic mismanagement, and its currency, the Zimbabwe dollar, has been hyperinflated multiple times. In 2009, Zimbabwe abandoned its own currency and adopted the US dollar as its official currency. This helped to stabilize the economy, but it also made Zimbabwe vulnerable to US sanctions.
In 2020, Zimbabwe legalized the use of foreign currencies in domestic transactions, including the US dollar, the British pound, and the euro. However, the Zimbabwe dollar remains the official currency of the country.
Zimbabwe's application to join the New Development Bank (NDB), the BRICS's bank, raises a number of questions about the NDB's commitment to de-dollarization. Zimbabwe's reliance on the US dollar could make it difficult for the NDB to promote the use of non-dollar currencies in trade and investment.
Additionally, Zimbabwe's history of economic mismanagement could raise concerns about the NDB's lending practices. The NDB has already faced criticism for its lending to Venezuela, which is also in the midst of a severe economic crisis.
Some BRICS members may be concerned about the political implications of admitting Zimbabwe to the NDB. Zimbabwe is currently ruled by President Emmerson Mnangagwa, who has been accused of human rights abuses and election fraud.
As a matter of fact, Mnangagwa is accused of election fraud in the 2023 Zimbabwean presidential election. The opposition Citizens Coalition for Change (CCC) party has alleged that there were widespread irregularities in the election, including voter intimidation and harassment, manipulation of the voter’s roll, irregularities in the counting and tallying of ballots, and interference by the Zimbabwe Electoral Commission (ZEC). These accusation have worsened the case of Zimbabwe’s potential membership in the NDB.
Despite these concerns, some BRICS members, such as Russia and China, have expressed support for Zimbabwe's application to join the NDB. They may view Zimbabwe as a strategic ally and may be interested in using the NDB to expand their economic ties with the country.
Ultimately, the decision of whether or not to admit Zimbabwe to the NDB will be made by the bank's board of directors. The board is composed of representatives from all BRICS countries, and each country has one vote. A decision to admit Zimbabwe would require a simple majority vote.
This shows that the BRICS Alliance may not be a sustainable bloc in the long-term since they can barely agree on anything. They have different economic and political interests, and they often disagree on a range of issues. This is reflected in the NDB's lending practices. The bank has funded projects in both BRICS countries and non-BRICS countries, including some that are considered to be high-risk borrowers.
If Zimbabwe is admitted to the NDB, however, it will be interesting to see how the bank manages the risks associated with the country. The NDB will also need to be careful not to undermine its messaging about de-dollarization.
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