Iran’s position in the New Development Bank (NDB) requires a careful assessment of the Bank’s structure, level of independence, and financing mechanisms. The NDB was originally established to reform the unequal and inefficient structure of traditional multilateral development banks. However, nearly eight years of operational experience indicate that, in terms of exposure to international regulations and funding structures, the NDB shares important similarities with other multilateral development institutions.
As a relatively new institution with a limited membership base and a long-term lending profile, the NDB relies on borrowing from international capital markets, attracting foreign investors, and cooperating with national and regional development banks to finance its projects. Consequently, in the short term, the Bank does not possess complete decision-making autonomy independent of the broader international environment.
A notable example is the suspension of the NDB’s operations in Russia following the imposition of international sanctions. This case illustrates the extent to which global political and financial dynamics can influence the Bank’s engagement with member and prospective member states, including Iran.
During preliminary and formal negotiations, Iran should clearly articulate its policy positions on sensitive issues in order to minimize potential disagreements in later stages of cooperation.
One practical strategy for strengthening engagement is for Iran to propose the provision of non-financial services, including technical expertise, training programs, research collaboration, technology transfer, and the participation of Iranian firms and institutions in joint projects.
Article 19 of the NDB Agreement allows for the financing of projects implemented within a member country through the participation or guarantee of other members. Iran could design projects under this framework to enhance its access to NDB resources.
Although the NDB was created as a more equitable alternative to traditional development banking structures, its relative dependence on international capital markets and compliance with global regulatory frameworks may create constraints for Iran’s engagement. Nevertheless, strategic planning and prudent negotiation can expand the prospects for effective cooperation.
