Why would Pakistan’s entry to the New Development Bank make little sense?

Thamba Hlophe

With 5 founding members, and the addition of 4 new members between 2021, 2023, and 2025, 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. Over this time, this relatively new multilateral bank has been highly successful in achieving strong credit ratings, fundraising, and growing a vast portfolio of projects. The NDB has raised a significant amount of capital, including billions of dollars in bond issuances in China and other markets. In terms of portfolio, by 2024, NDB approved $39 billion in total project financing. This growth is impressive, making it comparable to its senior multilateral development banks.

The addition of new members, as latest as of May 2025, with three prospective members, spread across the continents of Africa, Asia, and Latin America, speaks volumes about the growing stature of the new bank. Led by emerging economies, the equal economic prowess and developmental needs, along with equal financial contributions, provide each member equal voice and decision-making power.

Given the expansion of the bank and the rising number of prospective members, a new buzz in the global community is the desire of Pakistan to become a member of NDB. However, this new prospective membership is contentious and, to a large extent, antithetical to the fundamental purpose of the bank.

Let’s review the current scenario. First, considering the features of NDB’s members, the economies joining the bank are categorised as emerging market economies (EMEs). The EMEs are those developing economies that are characterised by rapid growth and successive integration into the global marketplace. Increasing industrialisation, fast GDP growth, and a burgeoning middle class (despite political instability and currency volatility as faced by some) are the major identifiers of an EME. Second, the member nations, on average, have shown political stability and consistent economic growth, despite various economic challenges, making growth resilience an important aspect of these economies.

Now, to begin with, let’s assess Pakistan's prospects as a member on these two points. Pakistan is considered a ‘frontier economy’, characterised by lower liquidity, small market size, politically manipulated markets, and faltering GDP. Not many things are right with Pakistan’s economy currently. The internal inconsistencies of Pakistan, characterised by political instability, economic stagnation, militancy, food and energy insecurity, make its contribution to the NDB highly dicey. The fragile macroeconomic conditions and enormous dependence on the IMF funds are also major pitfalls for Islamabad.

Another important question is: if Pakistan joins BRICS, will it be able to handle the political and economic pressure from its Western partners, like the EU and the US, on whom it depends directly and indirectly for its finances? There is no doubt that BRICS and the resulting NDB have been sometimes taken nonchalantly, other times with skepticism by the West, as it stands to challenge the contemporary global hierarchies. The pursuit of BRICS membership can turn antithetical to Pakistan itself: either it will lose its funding and preferential trade treatments from the West, or it will keep on aligning with the Western agenda, making it ineffective as an NDB member. Given that Pakistan has shown frequent episodes of growth reversal throughout its history, it is obvious to be skeptical of Pakistan's growth trajectory in the future, which may not be in tandem with the existing and other prospective NDB members. Pointing back to the internal inconsistencies, there is a high possibility that there would be a lack of domestic consensus-building in Pakistan, given the existing coteries of vested interests in Pakistan, like the army and the political elites.

One factor, which, though very popular, might hold less weight than what it is attributed to in popular opinion, is the Islamabad-New Delhi conflict. The global community saw the conflict rising into severe forms as recently as May 2025. Indeed, India would disapprove of Pakistan’s membership in NDB for various geostrategic and diplomatic reasons; however, that’s not the end in itself. There are a few critics as well, who see Pakistan's entry to NDB as a platform for India and Pakistan to resolve their conflicts and strengthen bilateral diplomatic ties, while others fear that Pakistan’s entry would turn NDB into a SAARC-like setup where nothing gets done due to a continuous state of geopolitical tension. However, the lack of economic growth, non-EME status, and excessive dependence on the West are the denominators sufficient for the existing members to contest its accession. The India-Pakistan conflict is like the cherry on top, further reducing the trust in its viability and efficacy as a member of NDB. Thus, not just India, but other members would also question Islamabad as its membership would defy the very economic logic of the bank. The current poor economic conditions and political instability, and its weak financial management record, could make other members, including its otherwise allies like China, disapprove of its entry. 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 concern is not misplaced. Once Pakistan becomes a member, it would have access to the BRICS’s Contingent Reserve Arrangement (CRA), which, with a capital of more than $100 billion, helps member states withstand any short-term balance of payment crises.

Now, given the economic condition of Pakistan since 2021, if allowed in BRICS, it can access CRA funds and exploit the comparatively lenient loan conditions of NDB. The easy access to loans without a stringent control regime, like that of the 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, and with that, it might also end up losing its credibility and efficacy in the eyes of the prospective members and skeptics, thereby negatively impacting its expansion. This would provide a fertile chance for the West to prove that South-South Cooperation is unsustainable, and needs Western support to sustain. Thus, in a nutshell, Pakistan’s economic dispositioning and its excessive dependence on the West make it a less desirable candidate for NDB’s expansion. Its entry to the BRICS is not only going to burden the performance of NDB, but it will also work against the banks’ very objectives of resource mobilization and sustainable development.

*Themba Hlophe is a journalist and commentator.