The growing trend of de-dollarisation, China's economic resilience, unprecedented flows of oil and gas and the opening of new markets as a result of active geopolitical flashpoints around the world are just some of the features of a changing world order, Osama Rizvi writes.
ADVERTISEMENTNew alliances are also some of the features of a changing world order and Europe can benefit from these changes.
A world order isn’t something you would hear about in conspiracy theories or movies. It is not a grand scheme of things controlled by a handful of people.
World order refers to the power dynamics, rules and norms between states, international institutions, and other global actors.
It features various characteristics such as economic systems and regulations, security arrangements, diplomacy, cultural and ideological settings, power distribution, and international institutions.
What represents a changing world order?
A changing world order manifests itself in various forms. For instance, shifts in power are a major indicator suggesting this change.
The rise of China as an economic power is a perfect example of this. Other indicators may include a global crisis such as the COVID-19 pandemic that changed not only the fate of the global economy but also impacted the way we live and businesses operate.
Technological advancements such as the recent proliferation and improvement in artificial intelligence and machine learning (with the influx of bots like ChatGPT and Google Bard) are another indicator of a changing world order.
This creates implications for everything from the deepfake videos threatening our privacy to election results.
Changing trading patterns is a very strong indicator of changing world order. For example, a fifth of oil trade worldwide was carried out in non-dollar currencies in 2023, according to JP Morgan. Twelve contracts were settled using non-dollar payments against seven in 2022 and only two between 2015 and 2021.
These are some of the patterns that, if they emerge, signal a changing world order.
Europe and shifting sands
With so many emerging trends and changing contours, it is of great importance that Europe takes some time to reconfigure its relationship with the following regions so that it is able to sustain its mark in the global community.
With the outstanding rapid development of the Asian region, its stature on the global stage cannot be overlooked. Asia has most of the world's foreign trade reserves and is a safe haven for several of the world's largest economies.
It represents 60% of the world's population, having 10 times as many people as Europe. Therefore, the key factors in shaping the European and Asian relationship are trade and investment cooperation, leading to economic interdependence and prosperity.
Considering the rise of other political and economic blocs in the manifestation of Brazil, Russia, India, China and South Africa (BRICS), it is of paramount significance that Europe enhances its relationship with its partners so that it can benefit from each in related capacities.
For example, cooperation with Gulf partners can bolster the energy market; cooperation with South African states can open a pathway to abundant mineral resources while cooperation with India can help balance the Chinese influence in the region.
Where does Europe stand with China and the Middle East?
With the constant inclination towards mistrust for each other, Europe and China seem to be well apart in terms of cooperation and collaboration.
China's Foreign Minister Wang Yi, in October last year, expressed his country's concern by stating: "China hopes that the European Union (EU) will adopt a more pragmatic and rational attitude in cooperation with China."
If Europe succeeds in adopting a "more pragmatic and rational attitude" with China, Europe can counterbalance the influence of China in the geopolitics, technological and economic sphere.
ADVERTISEMENTDespite having different views on international and regional issues, both the states can adhere to communication and collaboration, while bearing in mind their fundamental concerns and interests.
Considering the changing trends of the Middle Eastern region and the growing Chinese influence, Europe faces a challenge to penetrate the markets of Gulf countries.
As a significant trading partner for Egypt, Turkey, and Jordan, Europe needs to work on the climate and tech-focused partnership, to ensure energy efficiency and clean energy production.
Promoting connectivity through the region in order to secure its own energy needs should be the prime focus of Europe so that it can survive the blow of changing world order.
Osama Rizvi is an economic and energy analyst with a focus on commodities, macroeconomy, geopolitics, and climate change.
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