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The war in West Asia will accelerate US decline and rise of China. It will force Europe to kick the habit of holding on to Uncle Sam's coat-tails, and make it grow up fast. It will speed up the ongoing shift of nations towards energy security (read: freedom from imported fossil fuels and embrace of electricity for mobility, cooking and heating). Trump's fond baby will be left holding its drill, as the world switches decisively to renewable, geothermal and nuclear energy.
Trump plays many roles - willingly, like that of Christ healing the sick; unwillingly, as validator of Lenin's saying that there are decades in which nothing happens, and there are weeks when decades happen. In the 66 weeks since he took office, Trump has made decades happen.
His tariff war has destroyed goodwill across the globe. His illiterate rejection of climate change, withdrawal from WHO, steep cuts to foreign aid and threat to end the 'Iranian civilisation' have exposed not just him, but also the country he leads, as a malign power that preys on the weak and knows neither scruple nor principle. Pax Americana lies as part of the rubble in Gaza and Tehran.
West Asia will change. Dubai may regain its role as a hub of global aviation. But it can't regain its status as a refuge for the world's billionaires fleeing taxes, rivalling Singapore, Cyprus and Monaco. Security can no longer be taken for granted. Saudi dreams for its new city in the desert now have moved farther away from reality.
This is assuming Iran comes out of the war intact as a nation. If the US manages to do what Western powers did to Libya - strip it of central authority and national cohesion - the entire region would be caught up in chaos. The Gulf monarchies are not stable monoliths, and can well unravel the way Iraq had for some time after Saddam Hussein.
War-induced panic in the financial markets has reversed flow of assets out of the dollar, into gold and other commodities. But this is likely to last only as long as the war. Once it's over, assets will redeploy ever more out of the dollar. Trump doesn't want a current account deficit (CAD), which is what draws external savings into the US economy, and leaves America's lenders holding US government bonds and other dollar-denominated assets.
But Trump's policies are widening fiscal deficit. If he manages to curtail CAD by weakening the dollar to make imports dearer for Americans, US savings would bear a larger chunk of government debt. Compression of CAD means reduced inflow of foreign capital, and - assuming demand for capital to invest in AI infrastructure and power will continue unabated - interest rates would rise.
Dollar would become more volatile, reducing its appeal as a haven currency. As it is, forex holdings in dollar have come down from 65% of the global total in 2015 to some 57% by Q4 2025. Several countries, like China and India, have increased their holdings of gold.
The war has diluted inclination of oil and gas majors of the Persian Gulf to trade their fuels in dollars. The US couldn't prevent Iran from attacking countries that played host to US forces. It couldn't prevent Israel from attacking Qatar either in September 2025, and has now only told Netanyahu to keep his bombing of Lebanon low-key.
The US keeps shouting it does not need oil coming out of the Strait of Hormuz. So, why should Gulf nations continue to price their oil and gas in dollars when they sell to China, India or Japan? The latter have plenty to import from China, and can use renminbi they take for selling oil to pay for these imports. Ditto for yen and Japan. The region has muscle memory of transacting with the rupee, harking back to when Britain had placed its West Asian territories under Bombay Presidency.
This is the ideal time for BRICS to launch, in consultation with Canada and the EU, a currency on the blockchain - a stablecoin pegged to IMF's unit of account, SDR (special drawing rights), with all participating currencies holding reserves, the basket of which IMF uses to value SDR, in the right proportions and quantities that would satisfy Trump's Genius Act for stablecoins in the US.
What would India get from such an arrangement? Rupee's not part of the SDR basket. What India would get is escape from dollar hegemony, and dollar and secondary sanctions, once the new stablecoin goes mainstream as the currency in which to settle trades that don't involve the US as a counterparty. The stablecoin could be called 'Bancor', to honour John Maynard Keynes, who had proposed such an alternative to dollar while setting up Bretton Woods institutions. Ending the US' ability to weaponise dollar is gain enough.
But will BRICS grab this opportunity? Even as chair this year, India couldn't muster the courage to condemn the US when it bombed a fellow BRICS member, Iran. China will present itself to the world not just as a stable, responsible superpower, but also as leading provider of everything electric - from tech, equipment and power electronics to EVs, and solar photovoltaic to solar thermal solutions.
India should probably ask the Americans to look for its lost strategic autonomy, if and when they search Iranian debris to retrieve a pile of enriched uranium.
Trump plays many roles - willingly, like that of Christ healing the sick; unwillingly, as validator of Lenin's saying that there are decades in which nothing happens, and there are weeks when decades happen. In the 66 weeks since he took office, Trump has made decades happen.
His tariff war has destroyed goodwill across the globe. His illiterate rejection of climate change, withdrawal from WHO, steep cuts to foreign aid and threat to end the 'Iranian civilisation' have exposed not just him, but also the country he leads, as a malign power that preys on the weak and knows neither scruple nor principle. Pax Americana lies as part of the rubble in Gaza and Tehran.
West Asia will change. Dubai may regain its role as a hub of global aviation. But it can't regain its status as a refuge for the world's billionaires fleeing taxes, rivalling Singapore, Cyprus and Monaco. Security can no longer be taken for granted. Saudi dreams for its new city in the desert now have moved farther away from reality.
This is assuming Iran comes out of the war intact as a nation. If the US manages to do what Western powers did to Libya - strip it of central authority and national cohesion - the entire region would be caught up in chaos. The Gulf monarchies are not stable monoliths, and can well unravel the way Iraq had for some time after Saddam Hussein.
War-induced panic in the financial markets has reversed flow of assets out of the dollar, into gold and other commodities. But this is likely to last only as long as the war. Once it's over, assets will redeploy ever more out of the dollar. Trump doesn't want a current account deficit (CAD), which is what draws external savings into the US economy, and leaves America's lenders holding US government bonds and other dollar-denominated assets.
But Trump's policies are widening fiscal deficit. If he manages to curtail CAD by weakening the dollar to make imports dearer for Americans, US savings would bear a larger chunk of government debt. Compression of CAD means reduced inflow of foreign capital, and - assuming demand for capital to invest in AI infrastructure and power will continue unabated - interest rates would rise.
Dollar would become more volatile, reducing its appeal as a haven currency. As it is, forex holdings in dollar have come down from 65% of the global total in 2015 to some 57% by Q4 2025. Several countries, like China and India, have increased their holdings of gold.
The war has diluted inclination of oil and gas majors of the Persian Gulf to trade their fuels in dollars. The US couldn't prevent Iran from attacking countries that played host to US forces. It couldn't prevent Israel from attacking Qatar either in September 2025, and has now only told Netanyahu to keep his bombing of Lebanon low-key.
The US keeps shouting it does not need oil coming out of the Strait of Hormuz. So, why should Gulf nations continue to price their oil and gas in dollars when they sell to China, India or Japan? The latter have plenty to import from China, and can use renminbi they take for selling oil to pay for these imports. Ditto for yen and Japan. The region has muscle memory of transacting with the rupee, harking back to when Britain had placed its West Asian territories under Bombay Presidency.
This is the ideal time for BRICS to launch, in consultation with Canada and the EU, a currency on the blockchain - a stablecoin pegged to IMF's unit of account, SDR (special drawing rights), with all participating currencies holding reserves, the basket of which IMF uses to value SDR, in the right proportions and quantities that would satisfy Trump's Genius Act for stablecoins in the US.
What would India get from such an arrangement? Rupee's not part of the SDR basket. What India would get is escape from dollar hegemony, and dollar and secondary sanctions, once the new stablecoin goes mainstream as the currency in which to settle trades that don't involve the US as a counterparty. The stablecoin could be called 'Bancor', to honour John Maynard Keynes, who had proposed such an alternative to dollar while setting up Bretton Woods institutions. Ending the US' ability to weaponise dollar is gain enough.
But will BRICS grab this opportunity? Even as chair this year, India couldn't muster the courage to condemn the US when it bombed a fellow BRICS member, Iran. China will present itself to the world not just as a stable, responsible superpower, but also as leading provider of everything electric - from tech, equipment and power electronics to EVs, and solar photovoltaic to solar thermal solutions.
India should probably ask the Americans to look for its lost strategic autonomy, if and when they search Iranian debris to retrieve a pile of enriched uranium.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
T K Arun
The author was formerly an editor at the Economic Times