Here is the full transcript of founding Vice President of BRICS' New Development Bank Paulo Nogueira Batista Jr.'s interview with Prof. Glenn Diesen on "Decline of the IMF & Rise of the BRICS New Development Bank"
Thursday, December 4, 2025
GLENN DIESEN: Hi everyone and welcome back to the program. Today we are joined by a very extraordinary guest, Paulo Nogueira Batista, who is a former executive director at IMF. Between 2007 and 2015, he was also founding Vice President of BRICS New Development Bank, responsible for risk strategy.
PAULO NOGUEIRA BATISTA JR.: It's a pleasure. Glad to be here.
GLENN DIESEN: You have extremely unique work experience that allows you to, I guess, compare the IMF with the BRICS New Development Bank. And also some of the challenges I think that BRICS has. As we know, it's great opportunities, but also is facing some challenges in terms of being undermined from the US, for example, but also how to organize the bloc from within.
However, I thought we could start perhaps just with the IMF, given that this is a model which the BRICS New Development Bank to some extent have to use as a starting point to compare. I was just wondering, how do you see the IMF governance structure in terms of favoring some economies over the other? And what kind of reforms do you think were required? Because I guess one can see the BRICS Development Bank as a response to the failure perhaps of not pushing through some of these reforms.
The IMF's Frozen Governance Structure
PAULO NOGUEIRA BATISTA JR.: That's right, yeah. My experience in the IMF ultimately led me to believe that fundamental change in Washington institutions, in Washington-based institutions like the IMF World Bank, is not really possible.
We did make some progress back in 2008, 2010, when the deep financial crisis on both sides of North Atlantic led the advanced countries to be more amenable to changes. But since then nothing happened. And for 15 years the IMF has been frozen, as well as the World Bank, in terms of fundamental changes in governance. So it's like, I would say in a nutshell, it's like this: The IMF and its major shareholders, Europe and the United States notably, they are determined to keep the institution in the 20th century, whereas we, BRICS and other developing countries, want to move into the 21st century.
Which means having institutions that are more representative, more inclusive, and less politically biased than the IMF and the World Bank are.
GLENN DIESEN: And how do you see in the IMF though, the informal power structures, the voting powers, or the use of political conditionality? To what extent do you see this as a, I guess, enduring problem?
Weaponization of Western Institutions
PAULO NOGUEIRA BATISTA JR.: It's an enduring problem. It's getting worse, in fact, I believe, because not only governance has been frozen, but the West, dealing badly with its... By West, I mean essentially Europe and the United States and led by the United States. The Western bloc has been holding on to its privileges and power in the IMF and using it increasingly as a political weapon.
So see, the West has weaponized everything. It's weaponized the dollar, weaponized the euro, weaponized the Swift payment system, weaponized the IMF, weaponized the World Bank. This means, of course, that first, the West is willing to do anything, and second, that it's willing to wreck the credibility and reputation of the institutions that they created and control.
So it's a very peculiar situation which we're living now. And that's why the BRICS have come together, first of all as a group of countries, and second, have decided to create institutions of their own, notably the BRICS Development Bank of which I was a founding member.
But Glenn, this is a very unexpected turn of events. When I first went to Washington in 2007, when the BRICS started getting together around 2008, I never expected the BRICS to go as far as creating their own bank and their own monetary fund. But we did that. Why? Not because the BRICS were hostile to the Washington-based institutions. Because we realized around 2012, more or less 2011, that no fundamental changes would be forthcoming beyond those that we had achieved in 2008, 2010 reform in the fund, you see.
So actually, you are often in Valdai and I've been involved in Valdai for the annual meetings. I don't know if you remember, last year I asked Putin a question. I asked President Putin, "How do you see the BRICS role in de-dollarizing the world economy?" And he responded, "Look, let's take it easy, let's take it slowly," more or less in this sense, because the dollar... "We are not against the dollar," he said. "The dollar is against us."
So really, I see the BRICS mostly on a defensive line and the West, unaccustomed to decline, struggling and kicking and screaming all the way down. It's a very dangerous situation, very dangerous, because superpower decline may be more violent than in normal times.
Institutions Must Reflect the Distribution of Power
GLENN DIESEN: Yeah, well, it's often said that institutions work best when they reflect the actual distribution of power. So when all this power shifted to the East and, well, in general diversified away from the political West, one would assume that for existing institutions like the IMF to maintain its relevance, it would have to reform, adjust to realities. And failing to do so, one would expect new institutions to emerge.
And I guess there's a reasonable way of looking at the BRICS. Well, I very much agree with you. I get the impression from listening to different diplomats and economists that the goal isn't to sink America into the ocean. Rather, it's simply to diversify, to make other countries less reliant on unreliable and weaponized dollar.
But do you see it the same way? Is it the relative decline of the United States that's causing a lot of these preparations in the format of BRICS?
PAULO NOGUEIRA BATISTA JR.: I think it's a relative decline of the political West, more generally. You see, for them, all these institutions, they're relevant. We say they're increasingly irrelevant, often because, for the reasons you mentioned, because we feel they're not representative, they're not inclusive.
But for the West, the dollar system, the Swift system, the IMF, the World Bank, all these are in fact weapons in the struggle against the rising new powers, especially China. So I believe that really what happens is that the West... I think this, again, that's the major factor in international economics and politics right now: the United States' willingness to use all instruments in a harsh and violent way to preserve the power it has now.
The power it has, it's no longer as great as it was even 10, 15 years ago, but it's still capable of doing a lot of damage, as we see right now in 2025.
The Dollar as a Weapon
GLENN DIESEN: Well, political economists often make the point that the economic hegemon which is dominant and confident will want to build trust around its economic infrastructure, the institutions, the currency, the technologies, supply chains. But a hegemon in decline will weaponize all of these economic instruments of power to prevent the rise of rivals, which then ultimately intensifies the rejection.
But you did mention the dollar, though. Why do you think it's become so dysfunctional?
PAULO NOGUEIRA BATISTA JR.: Basically because, again, it's a weapon now more than anything. In old times, the dollar was accepted and trusted and there was confidence in the dollar. Now this no longer holds. Why? Because the dollar has one major political enemy. That enemy is United States of America itself. You know, it has undermined trust in the dollar.
So now we have a very peculiar situation which we would not have expected. Say three... The US is trying to coerce other countries into using the dollar. That's a complete change from what we had since World War II, when the dollar was naturally accepted. You know, I don't want to idealize the previous situation. I mean, the US was always a hegemon that was willing to use power, interfere in countries, topple governments, et cetera, et cetera.
But now, as you said, in times of decline, it's much more inclined to be violent, to be oppressive than it was before. And this is showing very much. And you said it quite well, I mean, countries of the global South, even allies of the United States, are increasingly realizing that they cannot trust the United States anymore. Trust is lost.
And even if, let's say, Trump is replaced in the future by a more amenable president, trust will not be regained easily. It's easy to lose trust and very difficult to recover trust once it is lost, as we know, in personal relations and political relations and international relations.
So I'm a pessimist about any attempts, any chances of getting back to a relatively calm, peaceful situation in terms of geopolitical relations with the political West.
The Problem of Weak Political Leadership
GLENN DIESEN: Well, I often make that point as well, that one of the key problems of our times is these politically weak leaders, too ideological, incompetent, as we see in Europe, even incapable of doing very basic diplomacy. Such as the recent Dutch adventure by first seizing ASML, a Chinese tech company, and then being flabbergasted by the consequences, and then now they have to hand it back.
I mean, it's just... it is very strange that this isn't thought through properly because they're not even back where they started. Now not just the Chinese, but the rest of the world will be very careful before they put anything of value, investments, in Europe. It's just extraordinary self-harm is where I'm getting at.
But in terms of the dollar though, you mentioned before that Putin made this comment that Russia didn't quit the dollar, it was the dollar that quit Russia or put sanctions on Russia. But what is the process of de-dollarization? Because many people think it can almost be done overnight. But is it the capability to diversify or is it just the lack of intention? That is, you see the Chinese, for example, have some incentive to continue to use the dollar as well.
The Dollar Under Threat and the Path to De-Dollarization
PAULO NOGUEIRA BATISTA JR.: That's a crucial question, the one you're raising now, because ultimately what we have is the Western willingness to violate property rights in a major way. In this case, to mention of the Dutch, also in the case of the freezing of Russian reserves, and now all the talk about actually confiscating them. So the dollar is under threat because of all this.
De-dollarization has become a major issue. I've been writing on this since 2023 on a more or less systematic basis, and I've been making the point that de-dollarization ultimately means-that's a controversial one, by the way, this point I'm making now-de-dollarization ultimately means driving for a new reserve currency.
For a number of reasons, I don't believe the dollar will continue to be important. So will the euro, but they're no longer as important as they were. They tend to decline. International money is sort of a mirror of geopolitical circumstances. So the United States and Europe are declining, so will their currencies in terms of relative weight.
Who's going to pick up the slack that the dollar is leaving? Not the euro, not the other Western currencies. Will it be gold? Yes, that's happening. The collapse in confidence has left major central banks no choice but to go to gold.
Can it be the renminbi? I just spent a few weeks in China, discussed this with a lot of Chinese experts, and I came out with the impression-reinforced-that the Chinese are hesitating in putting up their currency as a replacement to the dollar for many reasons that we can discuss if you want.
And so if that's true, the only alternative would be to build a new reserve currency, not a global currency, because you cannot have a global currency with this geopolitical split that we have in the world now. So it would need to be a new currency sponsored by a group of countries, probably only of the global south. And that would be something truly new in terms of international money.
The BRICS Path to an Alternative Currency
GLENN DIESEN: I like the Bismarck quote, by the way. How about the BRICS, though? Is it in a position to facilitate an alternative? Because many people were speaking about the prospect of a BRICS currency. But from another perspective, it does seem less likely, and it seems it would meet a lot of internal resistance as well.
Especially whenever I talk to Indian diplomats or ambassadors, they always make the point that, "Oh no, we would never accept a common currency," I guess. Can you speak to this? Do you think there is any pathway, or why would there be resistance to it?
PAULO NOGUEIRA BATISTA JR.: Well, you know, right now I'm finalizing a paper that's called exactly "A Pathway to a New Reserve Currency." And there I recognize the point you just made, which is crucial. There's no full-scale, full cohesion inside the BRICS on this matter.
India is, of course, one resistance, one resisting factor. The other one, less commented upon, is the stance taken by our central banks that are very conservative and do not like to think or envisage this sort of change, use of a creation of a new reserve currency. Even modest, even more modest steps are resisted by Indian and our central banks. So it's not an easy proposition.
How do I respond to this in this paper that I'm finalizing? First, we should recognize that any new currency or any new initiative, practical, taken in the financial field, should be not BRICS but BRICS-centric. Let's put it this way. Most of the BRICS would be in, but not necessarily all.
India might want to stay out and join later, perhaps. So we should not be paralyzed by the need to mobilize every single member. Just look at the BRICS now-ten countries. India may be reluctant, but also Emirates, United Arab Emirates may be reluctant for political reasons. Ethiopia and Egypt may be reluctant given their relations with the IMF. They're dependent on the IMF right now.
So they might be very cautious in adopting any and joining any initiative that might touch on the raw nerves of the West. So definitely, if you look at the world, the global south, any initiative of that sort would have to be BRICS-centric. But it could also come from countries outside, countries outside the BRICS, partner countries or even others might want to join.
So you would have not a BRICS group, but a BRICS-centric group, and of course, China-centric. That's another point. One of the difficulties we have in envisaging new multilateral situations, initiatives, is the overwhelming relative size of China in any group, in any conceivable group of countries that you might put together for this sort of initiative. So there are many challenges, I would say.
Now the prevailing view, Glenn, which you may have heard already, the prevailing view is, "Oh, okay, we're de-dollarizing our international transactions. That's whether that works well enough." That's what the Indians are publicly saying. But there's a major flaw, economic flaw in this argument that India uses, that, you know, international transactions in your own currencies only take you so far because they do not allow, this system does not allow the persistence of trade surpluses and deficits between the countries, you see.
So you need-you always need money, trustworthy money. The dollar is no longer that. The euro is no longer that. Renminbi hesitates to play that role. Gold doesn't work very well. So you need some international money to de-dollarize more fully.
It's not by chance, Glenn, that Donald Trump has been very consistent and very cautious, exceptionally cautious in the way he frames the matter. He says, "We will not allow the role of the dollar as an international reserve currency to be threatened." So he's been well-advised by his people. Take a look at this. The BRICS are trying to put a different act together-warn them, threaten them. And that's what he's been doing. He's very good at threatening, or was very good at threatening. Now he's losing his credibility a bit.
This issue you've raised is a very complicated international economic political economy issue. But it will stay with us because I don't believe the dollar and the euro can recover their credibility. So we will need to look for alternatives.
A Basket of Currencies as an Alternative
GLENN DIESEN: Yeah, well, the first rule to economics seems to always be predictability, which makes sense that the different countries want slow, gradual changes based on testing, and as opposed to doing anything revolutionary that disrupts markets.
But without a common currency, though, is it possible-is a more likely pathway to have a basket of currencies? Because after the Second World War, you know, there was some ideals pushed, especially by the British, who instead of just having the US dollar as a reserve currency, who favored more this, you know, special drawing rights based on a basket of currencies. Again, the IMF did move, well, significantly forward this. But is there any similar thinking in BRICS, or are they going down a different path?
PAULO NOGUEIRA BATISTA JR.: It's important to understand, Glenn, that the BRICS are not a revolutionary force. They had never been. I can tell you from my experience inside the BRICS process, the BRICS are very cautious, always very careful. Even Russia-Russia is effectively at war with NATO, with NATO-even Russia is very cautious. So it's a reformist force, and we're looking at things we can.
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