Importance of GDP versus potential of natural resources

 If GDP defines overall global power and control, then Russia should have been destroyed long ago by the combined GDP of the USA and EU. What is equally important is the possession of resources and how important they are, that also measures a country's ability to stand up against any threats. Russia's energy resources alone, gives it more than what its meagre GDP could ever do, to counter the USA and Nato. Food and energy are essential needs of humans since time immemorial. The USA and Nato thinks that based on their combined GDP they could step on Russia like an ant.

Deng Xiaoping said, as early as 1987, that 'the Middle East has oil and China has rare earths'. What importance is attached to that statement is clear to all today. Then the Middle East oil producers were all close allies of the USA, but Deng realised early the importance of oil and rare earths in the future of things. Now the Middle East is potentially, in the Global South camp, and this is important. Who controls the oil also has leverage, not just the bragging rights of the high GDP countries.

The Global South controls the bulk of rare earth reserves, with China alone controlling 38%, with Brazil and Vietnam among the top three, making up about more than two thirds of global reserves. Rare earth is a very essential element for the military, semiconductor and EV sectors, among others. Moreover, China also controls 85% of rare earth refining globally, which speaks for itself. Even the USA needs China to refine their rare earth, said to be the best refiner in purity. China has yet to play its card with its rare earth controlling hand.

As for the Global South being not coherent and in transition, that is very true. But just look at Africa, which is slowly coming together and being brought together under the guidance of many well educated and dynamic leaders. There is so much potential for investments in Africa, resources to be exploited and the USA and the West failed to capitalise on the potential earlier, and are now scrambling to return (probably the objective is to exploit the essential resources). They let Russia and China cement their relations with African leaders for decades, while they concentrated on fighting wars in the Middle East and chasing terrorists. Now they USA and the West are not even welcomed by Africans.

The same scenario is being played out in Latin and Central America. Why are countries lining up to join BRICS, even Mexico? And these are countries rich in food production as well as mineral resources yet to be exploited. The future of their power lies underground, though they may lag in GDP growth at present. But their potential for growth is huge.

And Central Asia may be dirt poor today, looking at their GDP, but do not forget they hold massive resources underground. The old adage repeated by many historians - 'Central Asia holds the key to Global Supremacy' cannot be taken just as a passing footnote. What is so important in that dry, poor region that is so important in Geopolitics? I suspect China knows the answer and is now engaging with them in a big way. China will invest in the long term, not hit and run, building relations and forging co-operation, not war or countering countries.

Sure, for Western investors they can dilly dally, but China is not waiting and will undoubtedly be pouring more into Africa, Latin and Central America and Central Asia, with huge potentials already surfacing in Africa especially in housing, water resources, ports, railways, airports and other infrastructures. The fact that Western investors are sitting tight with investments shows they are just short term investors with 'grab and run' mentality, compared to long term investors like China, whose timeline is 20 to 30 years, as what former Greek Foreign Minister, economist and academic, Yanis Varoufakis said.

Anonymous