2025 to bring a new world order: report

Over the next 20 years, there will be a "massive shift of wealth" that will see China, India and Russia join the US as major economic powers, a report says.

The global order will shift dramatically over the next two decades as US hegemony wanes and eastern powers emerge as key players in a world that will be increasingly torn by conflicts over land, water and food. By the year 2025, a "massive shift of wealth", will see China, India and Russia join the United States as major economic powers, according to a report released by the US-based National Intelligence Council. It will also provide opportunities for Gulf countries, such as the UAE, to play a pivotal role in world politics.

The 121 page report, entitled Global Trends 2025 ? A Transformed World, is intended to provide a basis for policy assessment for the White House and intelligence community. "The unprecedented shift in relative wealth and economic power roughly from West to East now under way will continue," the report said. "The United States will remain the single most powerful country but will be less dominant."

It also warned of a rise in organised crime, a growing likelihood of nuclear conflict and resource grab as countries try to shore up supplies of scarce commodities. In a world where the US will no longer be able to act unilaterally, the Gulf could see itself in an important position, acting as a bridge between East and West, according to Mark Allworthy, a Dubai-based research analyst for the International Institute for Strategic Studies.

"The Gulf countries will become increasingly influential, with India and China and the West almost battling to strengthen relationships with the region," he said. "I think they will be in a strong brokering position." The global financial crisis may further cement the importance of states on the Arabian peninsula who have benefited from "windfall profits" after high oil prices, the report said. "If China, Russia, and Mideast oil exporters can avoid internal crises, they will be in a position to leverage their likely still sizeable reserves, buying foreign assets and providing direct financial assistance to still-struggling countries for political favours or to seed new regional initiative."

By 2025, an alternative and viable energy source to oil and gas is likely to have been discovered, the report said. It highlighted Saudi Arabia as the biggest loser in a "post-petroleum world" as it will be forced to tighten up on costs of the royal establishment and could face tension from some factions if it tries to implement economic reforms such as encouraging women into the workforce. The smaller Gulf states, which have been diversifying their economies, are likely to manage the transition well, it added.

Heavy investment in renewable energy programmes may also mean that the Gulf is more cushioned than one might expect from a shift away from oil, Mr Allworthy said. "The Gulf is one of the regions in the world taking the lead on alternative energy," he said. "For example, Abu Dhabi has invested huge amounts of wealth around the world; they are prepared for this." The scarcity of resources such as food, water and energy poses a major challenge for all of the GCC countries, as their total population is set to double to nearly 60 million by 2030 from 30 million in 2000. The UAE currently imports nearly 85 per cent of its food and is already looking overseas to boost its reserves. The Government of Abu Dhabi is now looking to agricultural investment projects in countries such as Pakistan, Kazakhstan and Egypt and has agreed to buy farmland in Sudan.

"The Gulf will be one of the worst hit by growing food shortages and there's a need for strategic planning of food security," said Eckart Woertz, an economic programme manager at the Gulf Research Centre in Dubai. The report predicts a world where there is a higher risk of nuclear conflict and non-Arab Muslim states such as Iran, Turkey and Indonesia may be central players. It said that although Iran's acquisition of nuclear weapons is not inevitable, worries about a nuclear Iran may spark an arms-race in the region.

"It is not clear that the type of stable deterrent relationship that existed between the great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear-weapons capable Iran," it said. Theodore Karasik, director of research and development at the Institute for Near Eastern and Gulf Military Analysis in Dubai agreed that Iran could be a "robust competitor" on the global scene.

Anwar Gargash, the Minister of State for Foreign Affairs, on Thursday night urged a high-powered audience at the annual conference of the Middle East Institute in Washington, to include the UAE in what may become the biggest foreign policy shift of Barack Obama's administration: resuming diplomatic relations with Iran. Mr Gargash said he sees a chance for the UAE to play a vital role in any future talks.

"We are neighbours, we share a waterway, communication has been easy." lmorris@thenationl.ae