The Changing Regional and Global Order – and the Implications for Arabs and the World

Over the past two centuries, there have been four transformations of the world order. The Congress of Vienna established a post-Napoleonic Europe that lasted until the outbreak of the First World War. The 1919 Paris Peace Conference created a framework for collective security that crumbled when World War II began in Europe in 1939. At the end of that conflict, many international agreements established a new global system to secure prosperity and prevent wars – the United Nations, the World Bank and International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade, now the World Trade Organization. 

The post-World War II order turned out to be bipolar, where two blocs – the US-led West and the Union of Soviet Socialist Republics (USSR) and the Communist countries in its orbit – competed in the Cold War. That contest ended in 1991 when the Soviet Union collapsed and the Warsaw Pact was dissolved. This is when unipolarity started, with the international playing field left for the US and its allies to dominate. Their aim was "full-spectrum dominance" – to ensure that the 21st century would be an American century and to thwart challenges from potential rivals. 

The “unipolar moment” did not last long, its end hastened by the US-led military misadventures in the Middle East and sealed by the 2008 financial crisis that broke in the US, resulting in global economic disruption and recession. Although the American-dominated order has fallen apart, its replacement has not yet fully emerged. The world system is clearly now multipolar, yet the international organizations of the post-World War II era have not been updated to reflect that current reality of global power diffusion. 

A new global landscape

The world is going through major transformations demographically, technologically, economically, geopolitically and in many other ways. A new global economic landscape is emerging, and the economic center of gravity is moving away from the West. The Munich Security Report 2020, “Westlessness”, to which many prominent Western officials and policymakers contributed, acknowledged that, while “the world is becoming less Western”, the West itself “may become less Western, too.” In 2019, French president Emmanuel Macron said: “We were used to an international order that had been based on Western hegemony since the 18th century. Things change.” In April 2022, Christine Lagarde, president of the European Central Bank, gave a speech titled “A new global map: European resilience in a changing world”, in which she acknowledged the major changes in the global system, noting that the West did not have monopoly on power. Although the West is losing relative power, she observed, many Western policymakers are against proposals for wider power redistribution in global governance.

In today’s de facto multipolar world, no one single country or group of countries is taking the lead in addressing global challenges. No one nation or bloc of nations can monopolize or dominate global affairs. To ensure power in the world is institutionally and sustainably shared more broadly, outdated organizations of the bygone post-World War II era need to be reformed. Simply put, the status quo is unfair and unsustainable. 

Old paradigms are disappearing – and new ones are surfacing 

The emergence of a new order is evident, as many paradigms, long taken for granted, unravel or are discarded. These shifts are happening in the global economy, finance and geopolitics. Because of the weakening US fiscal and monetary fundamentals and due to Washington’s weaponization of the dollar as a tool of diplomatic coercion, many countries are naturally seeking cover and alternatives. Russia and China have shifted away from using the dollar in much of their bilateral trade. 

Recently, the Chinese yuan has overtaken the US dollar as the most traded currency in Russia, on which the US and other mainly Western countries have imposed onerous sanctions, including exclusion from the SWIFT system for bank messaging and payments. Russian President Vladimir Putin has announced that his country wants to use the yuan in trade with other countries in Africa, Asia and Latin America. India, meanwhile, is actively promoting its currency in trade; 18 nations have agreed to use the rupee in bilateral trade, with more are expected to join. China and Brazil have decided to phase out the dollar in their trade and use their own currencies. 

American policymakers who made the decision to weaponize the dollar against Russia when they froze half of Russian foreign-exchange reserves knew that they were rolling the dice, but they failed to understand how their actions would accelerate a trend that has been playing out for over two decades. From 1999 to 2022, dollar holdings in official forex reserves have fallen from 70 percent to below 60 percent. China has reduced its US treasury bond holdings to below US$900 billion, while Saudi Arabia has brought its holdings down to below US$120 billion. With recent geopolitical and trade shifts, the erosion rate of dollar dominance will only increase.

The China National Offshore Oil Corporation (CNOOC) and France’s TotalEnergies recently traded liquefied natural gas (LNG), sourced from the United Arab Emirates (UAE), using the Chinese yuan as the settlement currency for the first time. Saudi Arabia has publicly said that it is open to settling its trade, including energy, in currencies other than the dollar.

The multipolar regional order

Calamities such as the global financial crisis, the pandemic and the Ukraine war are not turning points as much as they are catalysts of trends that have been in motion since World War II. In this decade, there will be more such dramatic disruptions, which could finally prompt real reform of the world system.

Consider the Ukraine conflict, which is a microcosm of a larger global contest. The war can be resolved and lives saved if there is a compromise between the West and Russia on a European security framework. Global tensions can be eased if the incumbents and rising nations agree on a new power-sharing mechanism. Yet, those who have dominated the international system since World War II seem unable to think strategically and imaginatively about a new world order. They think in zero-sum terms and cannot fathom how reforms can be made on a win-win basis. 

The growing multipolarity of the world is underpinned by new power realities across regions. The rising influence of nations such as China, India, Indonesia and Brazil is prompting major geoeconomic and geopolitical realignments in different parts of the world. This is certainly true in the Middle East and North Africa. It is only natural and sensible for Arab nations to diversify their strategic partnerships based on evolving interests and realities of power distribution.

The illegal and catastrophic invasion of Iraq in 2003 and the subsequent hostile “Freedom Agenda” of the US and its allies made it necessary for the Arabs to diversify their strategic partnerships and reduce dependency on any one single ally or group of allies. The disastrous “Arab Spring” events deepened the desire among Arabs for rebalancing the regional power structure. When Arab people were stirred up against their governments and leaders, some Western analysts rejoiced that “the Arab people have awakened”. That turned out to be a false awakening, however. The real Arab awakening is happening now, as the region and people unite for their future, fighting against the forces that are trying to maintain the status quo.

The new generation of Arab leaders is highly educated and more sophisticated than many of their counterparts in developed nations. They have a deep sense of history and fierce pride in their identity and heritage. Their vision is clear; their will is strong; their sense of urgency is high; and their focus is sharp. They have the resources and the talent to achieve their vision. As these leaders closely coordinate policies, their efforts to rebalance the regional order are gaining momentum. In the next two decades, no region will experience geopolitical and geo-economic shifts as significant as those in the Arab world.

Over the last 10 years, as the Arabs have started to regain their strength and unity, outside powers have lost relative influence in the region. Not only the US but all other Western players have seen their regional clout diminish. The Arabs are finding that their interests and strategic objectives increasingly align with a wide range of nations including – but not limited to – those in the West. The Arab world used to be the exclusive sphere of influence of Western powers. That is no longer true today.

To gauge the decline of US influence in the Arab region, one need only discern how China is taking a more active role in resolving regional conflicts such as Yemen and Syria. Beijing brokered the recent Saudi Arabia-Iran reconciliation. And Russia is also in the game. The process of normalizing Syria’s status within the Arab world is being led by regional nations such as the UAE and Egypt, supported by Moscow. 

The 1980 Carter Doctrine – that the US would use military force, if necessary, to defend its interests in the Gulf region – no longer applies. The Saudi Arabia-Iran rapprochement under China’s auspices is certainly a clear signal that the Carter Doctrine is obsolete and that the US is not the single dominant player in a region of now-fluid alliances and partnerships. 

American influence has been declining in the Arab world, not only because Washington has pivoted to attend to other priorities in Asia but also because many Arabs no longer consider America a credible and reliable partner. The US, however, is not leaving a vacuum. American influence is being replaced by the collective efforts of nations in the region to rebalance the regional order and deepen strategic partnerships with countries such as China, Russia and India. The era of the US undisputed hegemony in the region is over. 

Clash of visions for the region

There is a clash of visions for the Arab world between the countries in the region that are grasping their growing agency and some foreign powers who want to continue to hold hegemonic sway. The Saudi-Iran agreement, brokered by China, has revealed the flaws of previous efforts to bring peace and stability to the region. But it would be a mistake to think that the Arabs’ relations with the West and the rest of the world will continue as they have for over a century. In the next decades, the Arabs will try to reclaim their influence and their rightful role as an independent and considerable pole of power that deserves to be – indeed, must be – respected and dealt with in its own right.

While the Arabs no longer consider their region and the world to be dominated by one single power, some policymakers in the US and the West still erroneously deal with the region as if the world and the Middle East were still under unipolarity. They persist on viewing the world and the region through the prism of the hegemonic order of the 1990s and early 2000s. This misperception of the current regional power structure was evident in the US President Joe Biden’s statements prior to and during the Arab-US Summit in July 2022. While still in Saudi Arabia, he said: “We will not walk away and leave a vacuum to be filled by China, Russia or Iran.” Around the same time, Tony Blair, who was the UK prime minister during the 2003 attack on Iraq, asserted that “the West must not relinquish leadership in the Middle East.”

This is why Arab nations have been actively seeking memberships in organizations and initiatives spearheaded by emerging powers such as China’s Belt and Road Initiative (BRI), the Beijing-based Asian Infrastructure Investment Bank (AIIB), the BRICS grouping (Brazil, Russia, India, China and South Africa) and its New Development Bank (NDB), headquartered in Shanghai. Arab nations are either anchor or key members of many of these new frameworks. The Saudi Council of Ministers recently approved Riyadh’s joining the Shanghai Cooperation Organisation (SCO) as a dialogue partner.

It would be unwise to think that the Arabs do not want to continue their relations with US and Western powers. Both sides have many strategic synergies that they hope to capture. The relationship between the two sides, however, will have to mature and be balanced, as Arab nations seek to foster ties with other nations based on mutual interests.

The Arab world as a pole of power

Momentum is building for the Arabs to be a force in the new world order that is emerging. Many in the Arab world believe that now is a golden opportunity for the Arabs to make their presence felt in the world. The Arabs are strategically, demographically, and geographically well positioned to emerge as an autonomous pole of global influence in the coming decades. The Arab world is a swing player in the great power rivalry. The Arabs’ decisions about their own future strategic direction will help determine how the great power competition plays out and contribute to shaping the international and regional systems.

What we are experiencing today is nothing short of global regime change. We have already seen so many changes in the current decade – and it has only just started. The next few years are set to be the most eventful, and perhaps the most dangerous, since World War II. The evolution of global multipolarity did not start recently as a result of the vacuum left by those losing relative power. It began during and after the Second World War when peoples in different regions of the world broke the shackles of colonialism. Momentum for change only accelerated after the 2008 global financial crisis. The transformative shift gained further traction with the pandemic and the Ukraine crisis.

Just as World War II and 1956 Suez Crisis accelerated the collapse of the legacy empires of the 19th and early 20th century, recent events have expedited the end of hegemony and the emergence of multipolarity. The Ukraine conflict proves that the global tensions stem from the clash of visions for the world between those who want to preserve their privileges and dominant position in the status quo and those who are demanding equality and fairness in power distribution. China’s peaceful rise and growing importance, Russia’s reassertion of its global role and relevance, India’s carefully crafted strategic autonomy, Arabs’ renewed self-confidence and the political awakening in other regions are accelerating the process of global multipolarity. In the Arab world, there is a mismatch between what the Arabs want and what the legacy Western powers with nostalgia for their hegemonic days seek to maintain. The Arabs will no longer accept interference in their domestic affairs by outsiders.  

The question is whether the multipolar order will be institutionalized peacefully by consensus, or will the world have to endure another major war after which the victors will get to determine the new power structure in the world. The answer depends on the willingness and ability of the major competing rivals to reach a compromise on power redistribution within the international governance architecture. To avoid the kind of devastation the world experienced during the two world wars, vying nations should reach agreement on a global power-sharing structure. For their part, the Arabs must continue to coordinate their strategies closely, build their national and regional capabilities rapidly, and resolutely pursue their interests to become an important power in the emerging multipolar world.