If you were surprised by Saudi Arabia’s de facto takeover of professional golf, be prepared for many similar announcements in the coming months and years.
The Washington Post wrote, the rise of the Persian Gulf, and Saudi Arabia in particular, is reshaping the East.
Middle East already, but this move will also have dire consequences all over the world.
Quick quiz: What was the fastest growing large economy in the world last year?
If you think India or China is the answer, or any of the Asian tigers, you are wrong.
The answer is Saudi Arabia, which grew by 8.7%.
Kuwait and the United Arab Emirates also recorded significant growth.
The Washington Post continued, what explains this boom?
Despite what many hope, the world remains highly dependent on fossil fuels.
The Ukrainian war and the sanctions imposed on Russia reduced Moscow’s importance in the global oil and gas markets.
In addition, two of the world’s largest oil producers, Iran and Venezuela, are under sanctions and have aging and deteriorating oil infrastructures.
The United States produces a lot of oil and gas, but still imports large quantities.
As a result, the world now depends on a few countries in the Persian Gulf for a steady supply of oil and gas.
The Washington Post added, these conditions are likely to persist over the next decade, and if that happens, the Gulf will witness the largest inflows of wealth in history.
The four major sovereign wealth funds of these countries have reportedly amassed nearly $3 trillion in assets, an increase of 42% over the past two years.
Saudi Arabia expects its main investment vehicle, the Public Investment Fund, to reach more than $2 trillion by 2030, making it the largest in the world.
And for the foreseeable future, these will be the most important concentrations of capital on the planet.
The economic consequences of this wealth surround us everywhere.
Saudi Arabia has in fact, bought the professional golf company, and in January, Bloomberg reported that the kingdom sought to buy the Formula 1 racing franchise for more than $20 billion.
The $200 million a year may have lured the world’s most famous soccer star, Cristiano Ronaldo, to play for a Saudi club.
The latter is making huge investments in the online gaming industry, hoping to become a major player in this field.
Even the most prestigious sports teams and luxury hotels in Europe and brands run by Gulf States citizens.
As one Gulf minister told the author of the article: “We have strengthened the infrastructure in our country… What we are getting now is a cash investment”.
According to the Washington Post, “This increase in wealth helped shape the Middle East… The dominant players in the region – Egypt, Iraq, and Syria are, for various reasons, unable to play leadership roles, and the Gulf is the theater of action.
Saudi Arabia, in particular, has made a huge strategic shift in its foreign policy.
The rule of Saudi Crown Prince Mohammed bin Salman has witnessed an evolution since he assumed the reins of power in the Kingdom.
He repaired relations with Qatar and Jordan, restored diplomatic relations with Iran, and sought a peace agreement in Yemen.
All Gulf countries are working to deepen their relations with China, which is now the largest customer in the region.
In 2001, Saudi Arabia’s trade with the Middle Kingdom was just over $4 billion, about a tenth of its trade with the United States and the European Union.
In 2021, it amounted to about $87 billion, more than the United States and the European Union combined.
Economic relations are growing rapidly, and the Washington Post even reported that China has resumed construction of a military facility in the United Arab Emirates.
Saudi Arabia and the Gulf don’t seek divorce with the United States, rather, they want close economic relations with China and close security relations with the United States.
They want to be able to deal freely with all countries, including Russia.
If you want to see where the Russians have gone to escape Western sanctions, visit Dubai, where you will hear more Russian than Arabic in some hotels.
The Kingdom and the Gulf states also have growing relations with India, and they have begun to build new ties with Israel.
Most countries want to follow a policy that allows them to work independently and choose friends in the West and East in accordance with their interests.
The Washington Post concluded, if the Saudi crown prince continues down the path he’s on now, Saudi Arabia will likely be able to manage this balance.