The BRICS Summit (22-24 August) and the G20 Summit (9-10 September) were two of the highlights of this multipolar autumn, both marked by significant enlargements: the BRICS invitation to join addressed to Saudi Arabia, the United Arab Emirates and Ethiopia (headquarters of the African Union -AU); and the integration of the African Union as a permanent member of the G20.
With the BRICS’ decision to expand to six new countries, including Saudi Arabia, Argentina and Egypt (which are already members of the G20), they are demonstrating their confidence in their own power and the stability of their institutions, even if it means accelerating confrontations and alternatives to the Western-centric world order. And that’s where some damage will be reported. These two events mark a break with the past. The global balance of power has shifted in favour of the countries of the BRICS and the G20: India, Brazil, Argentina, Saudi Arabia, Egypt, Russia and China, the countries of the Global South, and they have decided to use their power together. First with membership, to increase this advantage, then with the refusal to publicly condemn Russia for its invasion of Ukraine at the end of the G20 Summit. The next step will be to reorganise global trade, financial and diplomatic flows.
From the coming months until 2024, the economic and financial competition will be between the countries that lead this renewal, those that do their utmost to join it, those that are excluded and those that have the means to resist it. Our traditional global economic panorama in this coming GEAB issue will help you see much better this map.
The two sectors that pose the greatest threat to the fragile stability of the system are the housing market and private debt. Here the Western world has much to fear from its own markets. China also has a big housing problem to deal with, but it has more levers at its disposal to fix the situation. The great strength of the BRICS+ is now their unparalleled influence on oil prices and therefore the petrodollar. However, their decision not to announce the launch of an international monetary instrument, even though all the architecture is in place, shows that these countries are not interested in seeing the dollar collapse abruptly, as we expected (GEAB 174, 15/04/2023: One currency will not replace another). This is also what we discussed with our collaborator Adrien Hubert, a specialist in digital currencies, within the Reader’s Eyes on the Future article format.
For its part, the EU has been struggling since the start of the war in Ukraine, and the first shocks are exposing the internal weaknesses of its solidarity. As a result, a boulevard is opening up for the far-right, which is on its way to succeeding in taking the place of the traditional right wing on the old continent.
And, as always, our investments, trends and recommendations will be there to help you navigate this world in perpetual flux.
A detailed summary of the 177 GEAB issue:
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