Iran-Saudi Rapprochement Will Deal a Deathblow to the Dollar
The comments below are an edited and abridged synopsis of an article by Andrew Korybko
Eurasia’s geo-economic integration took a leap forward as a result of the Iranian–Saudi rapprochement, which unlocks the Gulf Cooperation Council’s trade potential with Russia and China. Its members can now tap into two series of Iranian-transiting megaprojects through this deal, with the North-South Transport Corridor connecting them to Russia while the China-Central Asia-West Asia Economic Corridor (CCAWAEC) will do the same vis-à-vis China.
The bloc’s de facto Saudi leader has been prioritizing a comprehensive economic reform policy known as Vision 2030 that was introduced by Crown Prince and Prime Minister Mohammed Bin Salman (MBS) upon his rise to power in 2015. It stumbled as a result of the disastrous Yemeni War that he’s been waging, but everything is now back on track after securing $50 billions’ worth of investments from China last December.
Korybko discusses the People’s Republic and Vision 2030 as complementary to its Belt & Road Initiative; China’s previous reliance on maritime routes under the control of the US Navy for trade; and the switch to the Iranian CCAWAEC.
“All in all, it’s not hyperbole to declare that the [US] dollar’s prior dominance is done for as a result of the Iranian-Saudi rapprochement. That Beijing-brokered deal makes this outcome an inevitability unless some subversive black swan event takes place such as a US-backed coup against MBS, though that’s unlikely to happen after he successfully consolidated his power in late 2017. With this in mind, it can confidently be declared that that last week’s development will be seen in hindsight as a game-changer.”