Saudi Arabia and the BRICS group of countries’ New Development Bank are in talks on the kingdom’s potential membership.
The NDB currently has nine members – the five BRICS countries (Brazil, Russia, India, China and South Africa) plus Bangladesh, the United Arab Emirates, Uruguay, and Egypt.
Hailed as an alternative to Western-centric lending institutions like the International Monetary Fund and the World Bank, the NDB has the potential to help satiate demand for infrastructure investment among developing countries without forcing them to commit to devastating economic reforms. Furthermore, the lender’s local currency funding initiatives are specifically designed to reduce dependence on the US dollar and other reserve currencies.
“This decision has a political motive, but the economic aspect is of course the most important one,” Lebanese economist Jassem Ajaka told Sputnik Arabic, commenting on the talks between Riyadh and the NDB.
“Riyadh’s benefit from joining is clear, given the potential for increased trade, and Saudi exports especially. The Kingdom of Saudi Arabia is one of the largest suppliers of oil in the world, and the BRICS countries produce many different goods. Therefore, such cooperation can be considered to be mutually beneficial,” Ajaka said.
The economist expressed cautious optimism about the rise of a new world economic order, saying the kingdom can play a positive role, but that the realignment will be “a rather long process.”
Saudi membership in the NDB would result in the expansion of the internal market of BRICS countries, meaning new opportunities for economic growth in these countries, according to Ajaka.
Pending increased cooperation between BRICS and the wealthy Western powers, the economist believes that only when this happens can there be talk about “the transition to a new global economic order.”
For now though, “the Ukrainian crisis and disputes over Taiwan are the main obstacles to this process. Solving these problems also takes a lot of time,” the expert concluded.
Shifting Poles
The traditionally warm, strategic economic, political and defense ties between Riyadh and Washington have suffered a major cooling under President Biden, with Saudi Arabia accusing the US of ignoring the kingdom’s security concerns, and criticizing Biden over his personal attacks against the Saudi crown prince.
The recent success of normalization talks between Saudi Arabia and regional neighbors (including traditional adversaries like Iran and Syria), combined with Riyadh’s announcement in January that the country is open to non-dollar oil trade, threatens to upset the delicate balance on which Washington’s global power in the world depends. For over half a century, Saudi Arabia’s agreement to sell hydrocarbons exclusively in dollars has helped to pump up the dollar’s reserve currency status. Without it, the greenback’s role in the world could plummet.
Saudi Arabia is one of five Arab nations expressing interest in joining the BRICS group, with the group of nations already outpacing the G7’s combined global economic weight, and on course to establishing a new, multipolar economic and global security architecture.