From BRICS to OASES: a global platform for small economies on the international arena

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Yaroslav Lissovolik,Head, Analytical Division, Global Markets Department (CIB), Sberbank

• Rather than largest economies forming the vanguard of global governance, there could be role for smaller economies that show success in economic policies and international mediation.
• Collectively these countries can be brought under the umbrella of the acronym OASES – Oriental Republic of Uruguay (ORU), Austria, Switzerland, Emirates and Singapore.
• OASES economies can serve as role models in their respective regions in terms of urban development and economic modernization.

The reigning paradigm of the past decades, if not centuries, has been the dominance of the largest countries/economies in shaping the course of history and global economic development. In recent decades this was reflected in the emergence of such projects as the BRICS (the largest emerging markets), the G20 (the 20 largest economies in the global economy) and the G7.

But what if we were to entertain a different paradigm, in which rather than the largest economies exclusively forming the vanguard of global governance, a special role could be assigned to some of the smallest economies that demonstrate success in economic modernization and are active on the international arena in mediation efforts? What if we were to replace the standard quantitative approach towards country platforms with a qualitative approach that takes into account factors such as digital development and sustainability? And what would a grouping look like if it were almost the direct opposite of BRICS or the G20?

The countries forming such an alliance have the common features of being relatively small in terms of territory and population, but disproportionately influential in terms of international policy, mediation, regional integration and modernization examples. These countries could include:

• Singapore in East Asia
• Switzerland and Austria in Europe
• UAE in the Middle East and Africa
• Uruguay in Latin America

These are some of the smallest countries in their respective regions that at the same time have substantial economic clout, have relatively high standards of living and human development index (HDI), and have performed mediation services in conflicts within and outside of their respective regions. Collectively, these countries could be brought under the umbrella of the acronym OASES – Oriental Republic of Uruguay (ORU), Austria, Switzerland, Emirates and Singapore.

The OASES acronym is reflective of the important regional role that these countries play in the evolving economic climate in their respective regions and on a global scale.

OASES as a global platform for small economies

The key unifying theme behind the OASES grouping is to bring together the relatively small, but innovative and open economies from each of the main regions of the world to build a global platform that would prioritize sustainable development and advance best practices in economic modernization and governance.

OASES economies can serve as role models in their respective regions in terms of urban development and economic modernization. Nearly all economies in the grouping have international financial centres that could serve as poles of attracting capital and talent – such global financial centres (all of which are in the top-50 of the world) include Singapore, Dubai, Abu-Dhabi as well as Zurich, Geneva and Vienna. The presence of such international financial centres reinforces the role of OASES economies as entry points/gateways into their respective regions – Europe (EU and EFTA), Middle East (GCC), South America (MERCOSUR), South East Asia (ASEAN).

OASES economies are also leaders in their respective regions in terms of digital development. According to Huawei’s global connectivity index, Switzerland ranks number one in Europe, as does Singapore in Asia and the UAE in the Middle East and Africa, with Uruguay coming second after Chile in South America. Uruguay at the same time is the only economy globally that grants free laptops to every child and teacher in schools, and was also the first country in Latin American to launch the deployment of a 5G commercial mobile network.

There may also be scope for creating bilateral and multilateral digital platforms involving the OASES economies on the basis of concluding digital economic accords (DEAs). Singapore is a global leader in advancing such alliances across the global economy and is part of all of the main DEAs.

OASES economies also score well in their respective regions in terms of high ecological standards. According to the Environmental Performance Index (EPI), Switzerland and Austria are among the leaders globally and in Europe, while the UAE is among the leaders in the Middle East and Singapore is among the leaders in Asia.

Small countries as missing links in global governance

The distinguishing feature uniting some of the small open economies such as OASES is that they perform important mediation roles not only in their respective regions, but also on a global scale. The prominence of OASES in peace mediation, their neutrality in international relations may harbour important dividends for their economic development in terms of lower geopolitical risks and risk premia for sovereign and corporate assets in international markets.

Another crucial role that OASES play in the global economy is that of stability anchors and some of the largest reserve repositories. Taken together, OASES economies account for 11.5% of global international reserves, which compares with a 0.5% share of this group of countries in global population. The role of OASES economies in stabilizing the global economy is further magnified by the fact that they host or are members of regional financing arrangements (RFAs) that promote regional economic stability. It is in part due to these stabilization roles performed on a regional and global scale that OASES economies and their urban centres are becoming the key money management/wealth management centres in their respective regions.

Overall, the current state of the global economy suggests that the largest economies may be facing limitations in attempting to resolve the world’s challenges among themselves. The formation of global alliances with far-reaching ambitions should not be the exclusive prerogative of the largest heavyweights – there may be important niches on the international arena, where small economies could deliver superior results on the back of their agility and innovation. Platforms and networks among the small economies across the globe may be the missing element in overcoming the gridlocks faced by the current international set-up that is far too geared towards building alliances on the basis of size and quantity rather than sustainability and quality.