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The West's fusillade of sanctions on Russia following its invasion of Ukraine has been likened to the detonation of a “nuclear weapon” by a leading economist.
Speaking at an investment summit in London, Dr Mohamed El Erian, chief economic adviser at Allianz, said “most national security people I know didn't realise how powerful the disruption of a payment system can be”.
Unlike trade sanctions, global payments networks don't have an organisation such as the World Trade Organisation acting as mediator and regulator. It is this regulatory absence that worries Dr El Erian.
“We have entered a world in which we have weaponised something without all the infrastructure that comes with weaponising something that's so powerful.”
He doesn't envisage an immediate collapse of the existing dollar-based world economic order, but he does foresee a “much more fragmented system” in future, with countries who don't full ascribe to the western view of the world left feeling vulnerable by the payment system's weaponisation.
Nouriel Roubini, chief economist at Atlas Capital Team, says Russian sanctions have irreversibly widened an already emerging global economic fissure and that countries with a foot in both camps will soon have to pick a side.
“I think there is going to be a process where these countries try to decouple themselves from the US dollar as their reserve currency, and from the dollar planning system,” Mr Roubini said.
Like Dr El Erian, Mr Roubini doesn't think the process will “happen overnight” but that countries are now seeking viable alternatives to dollar assets such as gold.
Chinese new order
China's ambitions to form a counterweight to the West and its worries over the Washington-led weaponisation of finance mean it is at the forefront of this dollar divestment.
Mr Roubini said President Xi Jinping could even seek to persuade Saudi Arabia to price oil and make payments in Chinese yuan, as well as increasing its reserves of China's official currency.
He sees such manoeuvring as the start of the establishment of a “bipolar world in which there are going to be two areas of influence separate from each other”.
“There will be a separate trading system, a separate monetary system, a separate financial system,” he said.
“One area is going to be around US, Europe and their own allies. Another one is going to be around China, Russia, North Korea, Iran, Pakistan and many emerging markets that are sympathetic.”
Bob Browder, chief executive of Hermitage Capital Management, is less convinced the West's Russia sanctions will have such a schismatic effect.
“I don't think there's any way round the dollar, euro, sterling system,” he said.
“Russia has said we don't need dollars, we'll just deal with the Chinese currency or gold. But the reality is that almost all the economic activity in the world is conducted with the US, the European Union and with Japan.”
Against this backdrop, he sees sanctions against Russia as being a very effective ploy.
“I think Russia won't be able to survive just with China, India, South Africa and Brazil,” he said.
He compared the dollar-based hegemony to democracy, paraphrasing the famous Winston Churchill quote in which the former UK prime minister called democracy is “the worst form of government — except for all the others that have been tried”.
Mr Browder's analogy is questionable given that many countries have eschewed democracy and so could just as well do the same with the US dollar.
Money talks
The flaw was highlighted by Mr Roubini, who said many countries would be wooed by the Chinese offer.
“I remember I was at a conference a few years ago, and there was the president of an African country … and somebody asked him, 'Are you going to use the Chinese 5G system?' He said, 'Absolutely, it costs 50 per cent less than the western version.”
The leader in question was unconcerned about any influence Beijing would gain, suggesting if it weren't China, it would be the US.
IMF reform needed
The task facing the West to prevent the dollar's obsolescence in much of the world is a steep one, but Dr El Erian had some practical tips.
“You start with the [International Monetary Fund] and the World Bank, you give better voice and representation to developing countries,” he said.
“You take away the feudalistic rule that the head of the IMF has to be European and the head of the World Bank has to be American.
“[You take] seriously what's going to be happening in the developing world and put a framework for orderly restructuring.
“There's going to be a lot of depth restrictions coming out and you need a cover of a multilateral system for that.”
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European arms
Known EU weapons transfers to Ukraine since the war began: Germany 1,000 anti-tank weapons and 500 Stinger surface-to-air missiles. Luxembourg 100 NLAW anti-tank weapons, jeeps and 15 military tents as well as air transport capacity. Belgium 2,000 machine guns, 3,800 tons of fuel. Netherlands 200 Stinger missiles. Poland 100 mortars, 8 drones, Javelin anti-tank weapons, Grot assault rifles, munitions. Slovakia 12,000 pieces of artillery ammunition, 10 million litres of fuel, 2.4 million litres of aviation fuel and 2 Bozena de-mining systems. Estonia Javelin anti-tank weapons. Latvia Stinger surface to air missiles. Czech Republic machine guns, assault rifles, other light weapons and ammunition worth $8.57 million.
At a glance
Fixtures All matches start at 9.30am, at ICC Academy, Dubai. Admission is free
Thursday UAE v Ireland; Saturday UAE v Ireland; Jan 21 UAE v Scotland; Jan 23 UAE v Scotland
UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
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Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Tips for avoiding trouble online
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Inter Milan v Juventus
Saturday, 10.45pm (UAE)
Watch the match on BeIN Sports
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Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
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Dubai Rugby Sevens
November 30-December 2, at The Sevens, Dubai
Gulf Under 19
Pool A – Abu Dhabi Harlequins, Jumeirah College Tigers, Dubai English Speaking School 1, Gems World Academy
Pool B – British School Al Khubairat, Bahrain Colts, Jumeirah College Lions, Dubai English Speaking School 2
Pool C - Dubai College A, Dubai Sharks, Jumeirah English Speaking School, Al Yasmina
Pool D – Dubai Exiles, Dubai Hurricanes, Al Ain Amblers, Deira International School
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Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Director: Shady Ali
Cast: Boumi Fouad , Mohamed Tharout and Hisham Ismael
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Global state-owned investor ranking by size
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The Voice of Hind Rajab
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LOS ANGELES GALAXY 2 MANCHESTER UNITED 5
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Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
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Power: 375bhp
Torque: 520Nm
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