China-led SCO bloc looks to fast-track plan for new bank that would rival Western lenders
Member states seek more financial autonomy and localised credit by advancing an effort to fund regional growth using their national currencies, not the US dollar
A 10-nation security and economic bloc that includes China, Russia and Iran has accelerated efforts to launch a development bank, aiming to address the group’s growing infrastructure needs while challenging Western financial dominance.
However, the project faces headwinds as at least one key member may be less motivated than others to back the bank, according to an expert on the group, potentially complicating the path towards a final agreement.
In recent months, member states of the Shanghai Cooperation Organisation (SCO) have intensified multilateral consultations to hammer out specific details surrounding the joint lender.
In March, Beijing hosted the first consultation conference. The focus was primarily on shaping the architecture of the future bank, including capitalisation principles, institutional structure, and governance frameworks intended to ensure equal participation among member states.
Last month, at a subsequent conference in the Chinese city of Xian, Shaanxi province, SCO members deliberated on priority financing sectors, non-sovereign financing mechanisms, and the use of national currencies and alternative financial instruments to form the bank’s statutory capital, according to Kazinform, the main state news agency in Kazakhstan.
The latest round of talks took place on Thursday in Bishkek, the capital of Kyrgyzstan. They were co-chaired by China’s vice-minister of finance, Liao Min, and his counterpart in Kyrgyzstan.