By Mohammed Al Asoomi
The Russia-Ukraine conflict accelerated a global trend aimed at creating an economic and financial universe parallel to the existing system. We have in the past highlighted the possibility of the GCC countries joining the BRICS grouping of Brazil, Russia, India, China and South Africa, whose population together constitute 41 per cent of the world.
These countries also account for 23 per cent of the global economy and 18 per cent of trade, which reflects their relative importance to the global economy as a whole. Recently, Saudi Arabia applied to join the group, a move warmly welcomed by existing members. Discussions are also being held about the prospect of the UAE and Turkey joining as well, which will lead to a fundamental change in the global power dynamics and help create a more balanced order.
The likely accession of the three countries means a huge change that will tip the balance in favor of the East. Saudi Arabia, with its enormous potential in energy, the UAE as a global commercial and financial center, and Turkey, with its location, industrial and technological growth will add significant influence to the group and redistribute power between East and West.
More than tuned to geography
It goes without saying that a stronger BRICS means further dividing the world into two large blocs. The first will be led by the Western camp, which currently controls the levers of the global economy. The bloc includes Japan and Australia, while the Eastern power base is formed through the BRICS economies, despite the presence of Brazil in their midst. This means an intensified geopolitical competition ahead.
The accession of oil-producing countries would mean the group dominates with 31 per cent of global oil production, in itself a dramatic development that will have fundamental effects on international relations. Simply because the world will see an integration in BRICS the most important producers and consumers of energy. Further, the presence of key commercial and logistical centers within the group means greater control over global trade.
Right Cold War mindsets
The West is attempting to hold onto its historical positions, which it greatly bolstered after World War II, and attempting to resist any change in the structure of the global economy. At the same time making mistake after mistake by ignoring and failing to take into account the significant changes.
Consequently, it has lost significant supporters who have considerable political and economic clout.
As for the opposing pole, it acts cleverly with an open-mind and equitable interactions with other nations and embracing the dictum of shared interests. More are likely to join BRICS in years to come if the Western bloc does not alter its antiquated ideologies and practices.
Two opposing economic and financial poles will eventually emerge. The BRICS states announced the creation of a parallel bank with a $150 billion capital as a competitor to the IMF. Additionally, the Ukrainian crisis has significantly strengthened economic and trade ties between group members, making them more dependent on one another. Numerous businesses and institutions withdrew from the markets of the BRICS countries, and export restrictions were put in place on some high-tech goods to Russia and China.
Work towards an equitable global order
An expansion of BRICS may greatly contribute to the establishment of equitable relations based on the interests of many countries rather than on discord between countries in either pole. All of which requires a thorough understanding of global events and outcomes.
The existing economic system and its components, founded 80 years ago, are no longer feasible owing to massive changes in the economic and geopolitical balance of power, the emergence of new economic powers and the downfall of other. This truth should be properly understood if the world needs to avoid further conflicts getting in the way of an equitable global order.
Mohammed Al Asoomi is an economist and specialist in Gulf economic affairs.
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