Tag Archive for: UAE

BRICS is hardly a new fulcrum of world politics

One question that 2025 may begin to answer is whether the BRICS group (Brazil, Russia, India, China, South Africa) is becoming the new center of power in world politics. Now that it has added new members (Egypt, Ethiopia, Iran and the United Arab Emirates) and come to represent 45 percent of the world population, some believe that it is consolidating the (misleadingly named) Global South and posing a serious challenge to US and Western power. But I remain skeptical of such claims.

When Jim O’Neill, then the chief economist at Goldman Sachs, coined the ‘BRIC’ acronym in 2001, his aim was simply to identify the four emerging economies that were most likely to dominate global economic growth by 2050. But the label soon acquired a political relevance. BRIC became an informal diplomatic grouping at the 2006 United Nations General Assembly and then a formal organisation in 2009, with the first BRIC Summit. Hosted in Russia, the focus then, as it is now, was on advancing a multipolar world order. At the end of the following year, the group got its ‘S’ when South Africa joined.

A Wall Street asset class evolved into an international organisation partly because it aligned with Russia’s and China’s own aspirations to lead the developing world. The BRICS 16th summit in Russia in October 2024 was the first to include its new members. (Saudi Arabia has not yet decided whether to accept the group’s invitation to join, and Argentina’s new government declined.) Some 36 national leaders attended, as did representatives from many international organisations, including UN Secretary-General Antonio Guterres, and Turkey used the occasion to present its own application for membership.

The 2024 summit focused on fostering ties across the Global South and building a multipolar world, with Russian President Vladimir Putin using the occasion to demonstrate his global diplomatic relevance despite Russia’s invasion of Ukraine in 2022.

With more countries showing an interest in joining, it looks like the BRICS could indeed present itself as a leader of the resistance to the US-dominated international order. Some even see it as the successor to the Cold War-era Non-Aligned Movement, whose members refused to choose between the United States and the Soviet Union. But while NAM had a shared interest in resisting the US, it did not have Russia and China as founding members.

In any case, the BRICS is unlikely to succeed in formally organising the so-called Global South. Not only do its largest and most important members—China, India and Russia—all lie north of the equator, but the three are competing for leadership.

Russia and China do have a common interest in countering what they see as an American threat, and they have declared an ‘alliance without limits’. But such slogans mask major differences in their strategic perspectives. While Russia took vast swaths of territory from China in the 19th century, when the Qing dynasty was weak, China’s economy is now 10 times the size of Russia’s. Both countries are vying for influence in Central Asia, and China is uneasy about Russia’s recruitment of its neighbor North Korea to fight in Ukraine.

An even more important limit on the BRICS as an organisation is the rivalry between China and India, which is now the world’s most populous country. Although China is much wealthier than India, it is experiencing demographic decline (like Russia), while India’s population and workforce continue to grow.

Moreover, China and India share a disputed boundary in the Himalayas, where their forces have clashed repeatedly, and the situation is further complicated by China’s traditional friendship with Pakistan. In fact, an abiding concern about China is one reason why India participates in the BRICS in the first place. While it avoids formal alliances, it has also stepped up its participation in the Quad (whose other members are the US, Japan and Australia) for the same reason.

Rather than making the BRICS stronger, the admission of new members merely imports more rivalries. Egypt and Ethiopia are locked in a dispute over a dam that Ethiopia is building on the Nile River, and Iran has long-standing disputes with the UAE and prospective member Saudi Arabia. Far from making the BRICS more effective, these new intra-organisational rivalries will hamper its efforts. The Group of 77 developing countries has even more members, and it is chronically limited by internal divisions.

At their 2024 summit, BRICS+ discussed matters such as economic and security cooperation, promotion of cultural exchanges, and joint development projects focused on infrastructure and sustainability. But such talk usually does not yield significant results. In 2014, the group established the New Development Bank, which is headquartered in Shanghai; but the institution has had only modest results to date.

Likewise, the group’s stated intention of avoiding the dollar and clearing more of its members’ bilateral trade in their own currencies has made only limited headway. Any serious attempt to replace the dollar as a global reserve currency would require China to back the yuan with deep, flexible capital markets and the rule of law—and those conditions are nowhere close to being met.

So, what is the BRICS good for? As a means of escaping diplomatic isolation, it is certainly useful to Russia. As a diplomatic device for projecting leadership of the developing world, it also has been useful to China. As a channel through which to counterbalance China, it has its uses for India. And as a modest stage for touting national development, it has sometimes been useful to Brazil and South Africa. But do these functions make it a new fulcrum of world politics? I think not.

Authoritarian countries’ AI advantage

Last year, the United Arab Emirates made global headlines with the release of Falcon, its open-source large language model (LLM). Remarkably, by several key metrics, Falcon managed to outperform or measure up against the LLMs of tech giants like Meta and Alphabet.

Since then, the UAE has positioned itself as a frontrunner in the global artificial-intelligence race by consistently releasing updates to its powerful model. These efforts have not gone unnoticed: in April, Microsoft acquired a $1.5 billion minority stake in G42, the UAE’s flagship AI company, underscoring the country’s growing influence.

Analysts often attribute the UAE’s emergence as an AI powerhouse to several factors, including robust state support, abundant capital and low-cost electricity, all of which are necessary for training LLMs. But another important–and often overlooked–factor is the country’s authoritarian governance model, which enables the government to leverage state power to drive technological innovation.

The UAE is not alone. Authoritarian countries such as China have a built-in competitive advantage when it comes to AI development, largely owing to their reliance on domestic surveillance, which fuels demand. Facial-recognition technologies, for example, are used by these regimes not just to enhance public safety but also as powerful tools for monitoring their populations and suppressing dissent.

By contrast, facial recognition has become a source of enormous controversy in the west. The European Union’s AI Act, which entered into force on 1 August, has effectively banned its use in public spaces, with only a few narrowly defined exceptions.

This provides AI firms in China and the UAE with a massive advantage over their western counterparts. Research by David Yang and co-authors shows that Chinese AI firms with government contracts tend to be more innovative and commercially successful, owing to procurement practices that provide them with access to vast troves of public and private data for training and refining their models. Similarly, UAE firms have been allowed to train their models on anonymised health-care data from hospitals and state-backed industries.

AI firms seeking access to such data in western countries would face numerous legal hurdles. While European and American companies grapple with strict compliance requirements and a surge in copyright-infringement lawsuits, firms in China and the UAE operate in a far more lenient regulatory environment.

This is not to suggest that authoritarian countries do not have laws protecting data privacy or intellectual property. But the national goal of promoting AI development often takes precedence, resulting in lax enforcement.

Meanwhile, consumers in authoritarian countries tend to be more supportive of AI. An Ipsos survey conducted in 2022, for example, ranked China and Saudi Arabia–another authoritarian Gulf state with technological ambitions–as the world’s most AI-optimistic countries. These regimes’ widespread use of surveillance tools seems to have accelerated the commercial adoption of emerging technologies, possibly increasing public trust in the companies deploying them.

Moreover, authoritarian governments benefit from the ability to coordinate and direct resources toward innovation, especially through state-owned enterprises and sovereign wealth funds. Both the UAE and China have implemented top-down national strategies aimed at positioning themselves as global AI leaders. As I explained in a recent paper, the Chinese government is not just a policymaker but also a supplier, customer, and investor in this sector.

The UAE has adopted a similar approach. In 2017, it became the first country to appoint a minister of state for AI, whose primary mission is to facilitate public-private partnerships and provide firms with convenient access to valuable training data. Notably, the Falcon AI model was developed by the Technology Innovation Institute, a state-funded research centre. G42, which is backed by the UAE’s sovereign wealth fund and chaired by the government’s national security adviser, collaborates with various state agencies.

Recognising the vital role of academic research in driving technological progress, the UAE also established the Mohamed bin Zayed University of Artificial Intelligence, the world’s first university dedicated exclusively to AI.

Despite the many similarities between the AI strategies of the UAE and China, one crucial difference stands out: whereas China’s progress in advanced technologies could be impeded by Western restrictions on chip and equipment exports, the UAE enjoys unrestricted access to these essential resources. In 2023, G42 signed a $100 million deal with the California-based startup Cerebras to build the world’s largest supercomputer for AI training. And earlier this year, the company reportedly engaged in talks with OpenAI CEO Sam Altman about a potential investment in an ambitious semiconductor venture that could challenge Nvidia’s dominance in the industry.

But the reasons for the UAE’s success are still widely misunderstood. Tellingly, Altman recently suggested that the country could ‘lead the discussion’ on AI policy, acting as a ‘regulatory sandbox’ for the rest of the world. In praising the UAE’s approach, Altman obscures a fundamental point: it cannot be replicated in a democratic environment.

Minilateral groupings: the UAE and its role in the geopolitical landscape

Great-power competition between the United States and China continues to weaken multilateralism and the rules-based order. Despite that, the system is far from dead. Autocratic states increasingly seek to interact with international institutions in ways that violate institutional rules and norms, as well as those of the wider global rules-based order.

There are mixed motivations for doing so. For some states, there is arguably a broad agenda to undermine or fracture multilateral partnerships and the rules-based order. Unsurprisingly, minilateral or mini-multilateral groupings are forming to address specific economic or geopolitical challenges. To succeed, those groupings must target specific issues, build consensus and coordinate their members’ complementary strengths and resources to achieve shared goals.

To avoid further international fractures, Australia, the United States and like-minded nations must find new and effective ways to cooperate with international actors.

While media, commentators and social media continue to fixate on high-profile partnerships such as AUKUS, smaller, more focused and more flexible minilateral groupings are an emergent trend in international relations. AUKUS aims to deliver hulking projects over decades, while minilateral agreements enable more immediate defence, energy and economic developments.

The United Arab Emirates, through its strategic investments and partnerships, exemplifies this contemporary minilateral moment, particularly in the realms of clean energy and critical minerals.

One striking example is the UAE’s Partnership for Accelerating Clean Energy (PACE) with the United States. Launched in November 2022, PACE commits US$100 billion to develop 100 gigawatts of clean energy capacity globally by 2035. While it’s a bilateral partnership, PACE’s stated aims are expressly minilateral: to invest in clean energy within emerging economies.

This initiative is a testament to both nations’ commitment to diversifying their energy portfolios and addressing climate change. In January 2023, they announced the first wave of investments, allocating US$20 billion to generate 15 gigawatts of clean-energy projects in the United States. While PACE is a bilateral partnership, it’s part of the UAE’s broader strategy to enhance its renewable energy capabilities while maintaining its status as a leading oil producer.

The state-owned Abu Dhabi National Oil Company (ADNOC) plans to boost its oil production capacity to 5 million barrels per day by 2030 from 4.85 million barrels per day. It’s a practical dual approach to energy security and economic diversification. As Sultan Al Jaber, chief executive of ADNOC, has said, continued investment in hydrocarbons is essential to meet global demand and avoid severe supply shocks.

In addition to bilateral agreements such as PACE, the UAE has actively engaged in minilateral groupings such as the I2U2 group. Formed in 2022, this includes the United States, the UAE, India and Israel and focuses on infrastructure and food security. The I2U2 aims to leverage private-sector capital and expertise to modernise infrastructure, advance low-carbon development and enhance public health and food security. Notable projects include a US$2 billion investment by the UAE to develop integrated food parks in India and a renewable-energy project in Gujarat state.

The I2U2 group is emblematic of the UAE’s broader strategy to forge diverse partnerships that transcend traditional regional alliances such as the Gulf Cooperation Council. That strategy is partly driven by competition with Saudi Arabia for regional economic dominance, although the Israel–Gaza war may have cooled the UAE’s cooperation with Israel.

Despite its strategic investments, the UAE faces several challenges in pursuing minilateral cooperation, including aligning the diverse objectives of partner nations, ensuring transparency and accountability and managing public perceptions. For instance, the UAE’s relationship with the US has experienced strains due to divergent foreign-policy priorities and human-rights records. However, the UAE and its partners can navigate those complexities by focusing on geo-economic initiatives and shared interests, such as in the I2U2 framework.

Moreover, the UAE’s concurrent investments in renewable and hydrocarbon energy sources highlight its nuanced approach to balancing immediate energy needs with long-term sustainability goals. That approach, which considers the volatility of the global energy landscape, necessitates a pragmatic strategy that ensures energy security while advancing the clean-energy agenda.

The UAE’s active engagement in minilateral groupings reflects a broader trend in international relations in which countries form flexible, targeted alliances to address specific challenges. That approach allows for more effective cooperation in critical areas such as the energy transition, infrastructure development and food security.

Australia, too, increasingly engages with minilateralism while continuing to support the rules-based order and multilateralism. Australia has forged a network of 26 minilateral and bilateral agreements on critical minerals to establish new supply chains. As is commonly noted in those agreements, the supply chains must be diverse, secure and also economically, environmentally and socially sustainable.

However, the rapid proliferation of agreements and their tendency to vie with one another hinder the achievement of that objective. It appears to be motivated by political ambitions to secure agreements, rather than focusing on implementation.

As international competition intensifies, including over the clean-energy transition, such minilateral groupings are likely to become increasingly crucial in fostering international collaboration and achieving sustainable development goals. If Australia is to reap greater benefits from minilateralism, it must now focus on targeted cooperation on global, regional and national challenges. That cooperation must focus on building consensus and coordinating complementary strengths and resources to achieve shared goals.