Arab guests at G20 summit put Global South center stage
It is often hard to find consensus across large diplomatic groups, and the G20 is no exception. However, the members of this group of the world’s 20 largest economies, though often lacking in commonalities, do together drive the world economy. Very much a creation of the 21st century, the G20 club of countries rose in importance after the 2008 financial crisis.
The group’s growth in prominence provides a forceful addition to the role of the post-Second World War Bretton Woods institutions, which are less reflective of the balance of power in the world today. India’s invitations to the UAE, Oman and Egypt to attend this weekend’s summit, alongside members Saudi Arabia and Turkiye, put the Middle East at the forefront of the considerations of the Global South, following years of a perceived American disengagement from the region.
A fortnight after an unprecedently large BRICS meeting that saw the admission of the UAE, Saudi Arabia and Iran to the club of large developing economies, the G20 this weekend reinforced the trend that rapidly growing economies from the developing world seek to restructure the international system based on their disenchantment with the postwar global order.
The COVID-19 pandemic created major economic inequalities and exposed the unbalanced nature of an international system that is increasingly perceived to ignore the interests of the developing world. With the growing clout of these nations allowing them to increasingly promote their vision of the world, especially their own conditions for trading in the global economy, it is little surprise that India is using its G20 moment to reinforce these arguments.
Since 2004, when Canada surpassed Saudi Arabia as the largest single oil exporter to the US, the Middle East region has gradually strayed from the focus of US policymakers. Though the US remains a major trading partner of Saudi Arabia, the latter’s trade with China is almost double.
A surge in oil and gas exports from the UAE to China also makes Beijing its largest trading partner. Significant and importantly growing trade with India, Egypt, Pakistan and Turkiye, among others, highlight the increased importance of South-South trade and thereby the efforts of BRICS and India to integrate new actors.
Though Saudi Arabia, the UAE, Oman and Egypt have different levels of development, they are united in their strategic importance and indeed their potential for growth. Despite their position as energy producers, they will also play a role in the future of energy.
Oman and Saudi Arabia will play a role in hydrogen production and Egypt will be a significant producer of the “transitional fuel” of gas during the global energy shift that will inevitably take place. Together occupying the Suez Canal and the straits of Hormuz and Bab Al-Mandab, these countries are integral to global supply chains and ripe for a project akin to the International North-South Transport Corridor that connects India, Iran and Russia.
Alongside the strategic partnership that exists with Saudi Arabia, India has sought to expand its ties with the Kingdom beyond oil, focusing on the growing digital and innovation economy.
Zaid M. Belbagi
It is little surprise, therefore, that central to India’s outreach to Western Asian nations for the G20 summit is transport. Aside from New Delhi’s increased foreign policy focus on the future centers of global trade through the auspices of the G20, it has already been building its ties in the Middle East.
The UAE’s first ever comprehensive economic partnership agreement was signed with India in February last year. A dirham-rupee trade agreement has also come into force to encourage increased bilateral trade between the UAE and India, with a target of $100 billion in non-oil trade by 2030.
Alongside the strategic partnership that exists with Saudi Arabia, India has sought to expand its ties with the Kingdom beyond oil, focusing on the growing digital and innovation economy.
A rail and port infrastructure deal that would better connect the Middle East with India, though endorsed by the US under its “Partnership for Cooperation,” is very much indicative of India’s growing clout. The plans for a far-reaching, multinational ports and railways deal are a direct counter to China’s Belt and Road Initiative global infrastructure network, which also has the Middle East in its sights.
Though President Vladimir Putin’s continued absence from the G20 is significant, as British Prime Minister Rishi Sunak stated, he is “the architect of his own diplomatic exile.”
More significant for the Arab attendees was Chinese President Xi Jinping’s decision not to attend the G20 summit in New Delhi. Though seen by some as a snub toward the Western bloc at a time when China seeks to bolster the BRICS grouping, it is more likely borne of China’s resentment at India’s economic rise.
India’s growing role in the Arab world is also likely to concern China, which has worked assiduously to present itself as an alternative to Middle Eastern states seeking to renegotiate their relationships with the US.
Though India’s role has been hitherto economic, the recent military exercises conducted with Saudi Arabia, the UAE, Oman and Egypt, alongside increased diplomatic initiatives, could be seen as a challenge to China, which so recently sought to bring Iran and Saudi Arabia together in a major diplomatic coup.
Looking ahead, Arab nations must make sure that an apparent great-power vacuum does not force them to impossibly straddle the growing global geopolitical divide.
