Saudi Arabia’s latest strategic move has created ripples in the global political arena as it focuses on expanding its trade relations with the BRICS nations. As a prominent member of the G20 community, the oil-rich state’s shift towards developing alliances with emerging economies could potentially redefine the power dynamics in the region. In this blog post, we dive into the details of this significant move and its implications for the future of the global market.

Saudi Arabia’s Latest Move – BRICS Expansion is on the Horizon!

Introduction

Saudi Arabia is reportedly in talks to join the China-based BRICS bank, the New Development Bank, which could accelerate de-dollarization movements and shift the global financial system away from Western dominance. The Kingdom’s bid to join the bloc could see it become an official member, which is another blow to the US and Germany. This move is in line with a shift towards a multi-polar financial system that has been taking place since Russian sanctions.

What is BRICS?

BRICS is the acronym for Brazil, Russia, India, China, and South Africa. These countries are considered to be emerging economies and have formed a bloc to increase their economic cooperation. The New Development Bank (NDB) was established in 2014 by BRICS to provide financing for infrastructure and sustainable development projects in member countries and other developing countries.

Saudi Arabia’s Move

According to reports, Saudi Arabia is in talks to join the BRICS bank, which would make it the first Arab country to officially join the bloc. The move is seen as a strategic shift by the Kingdom to diversify its economic partnerships and reduce its dependence on the US dollar. Saudi Arabia currently pegs its currency to the dollar, which means that its monetary policy is heavily influenced by the Federal Reserve.

Threat to the Western Financial System

Saudi Arabia’s move to join the BRICS bank threatens the Western financial system, which is dominated by the US and Europe. The US dollar has been the global reserve currency for decades, which has given the US significant power and influence in the global financial system. However, over the years, countries have been trying to reduce their dependence on the dollar and shift towards other currencies.

The Battle Between Commodity Producers and Money Printers

The world order is shifting from a unipolar to a multipolar system, with a battle between commodity producers and money printers. Western countries such as the US and Europe have been printing money to boost their economies, while commodity-producing countries such as Russia, Brazil, and Saudi Arabia have been hit hard by falling commodity prices. The BRICS block represents a much larger share of the global economy than the G7, making Saudi Arabia’s bid to join the BRICS bank a significant one.

Benefits for Emerging Economies

Saudi Arabia joining the BRICS bank will strengthen emerging economies and give the global south a chance to break away from the dollar system. The NDB provides a much-needed alternative to the World Bank and the International Monetary Fund (IMF), which have been criticized for their policies that favor Western countries’ interests. The NDB’s focus on sustainable development projects also aligns with Saudi Arabia’s Vision 2030, which aims to diversify its economy away from oil.

Conclusion

Saudi Arabia’s bid to join the BRICS bank is a significant move towards a multi-polar financial system. It represents a shift away from Western dominance and towards a more equitable global financial system. The NDB provides an alternative source of financing for infrastructure and sustainable development projects that will benefit emerging economies. The future of the world order is shifting, and Saudi Arabia’s move is just the beginning.

FAQs

1. What is the BRICS bank?
   The BRICS bank is the New Development Bank, which was established in 2014 by Brazil, Russia, India, China, and South Africa to provide financing for infrastructure and sustainable development projects.

2. Why is Saudi Arabia joining the BRICS bank?
   Saudi Arabia is reportedly joining the BRICS bank to diversify its economic partnerships and reduce its dependence on the US dollar.

3. How does Saudi Arabia’s move threaten the Western financial system?
   Saudi Arabia’s move to join the BRICS bank threatens the Western financial system, which is dominated by the US and Europe, as it represents a shift away from their dominance towards a more equitable global financial system.

4. How will Saudi Arabia’s move benefit emerging economies?
   Saudi Arabia joining the BRICS bank will strengthen emerging economies and give the global south a chance to break away from the dollar system, providing an alternative source of financing for infrastructure and sustainable development projects.

5. What is the future of the world order?
   The world order is shifting from a unipolar to a multipolar system, with a battle between commodity producers and money printers. This shift represents a move towards a more equitable global financial system.