2 min read –
BRICS and G7 are two influential groups in the global economy.
BRICS was set up in 2009 and has become one of the leading voices for the emerging economies and the Global South in world affairs.
BRICS’s original members are Brazil, Russia, India, China, and South Africa.
Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates became new members of BRICS on January 1st, 2024.
The new enlarged group is now called BRICS+.
46% of the global population is within the BRICS+.
Today the BRICS+ countries account for 36% of the world’s GDP, leveraging their large populations and rapid economic growth.
G7 was founded in 1975. It includes the United States of America, Canada, Japan, Germany, France, Italy, and the United Kingdom.
This group of advanced economies collaborates on key issues like economic policy, security, and climate change.
Today the G7 nations account for 30% of the world’s GDP, reflecting their established industrial bases and high levels of income.
BRICS overtook the G7 in 2020 when its contribution to global GDP reached 31.5% compared to 30.7% for the G7.
Yet, when looking at GDP per capita, the BRICS remain behind the G7, with an average value around 2-3 times lower in 2023.
G7: 36,000 USD per capita; BRICS: 14,000 USD per capita.
The BRICS prevalence marks a significant shift in the global economic landscape, a trend that is likely to continue in the future according to economists.
The terms “new world order” or “new economic order,” as framed by The Economist in a recent article, are often heard.
The disintegration of the old order is visible everywhere.
Global capital flows are starting to fragment.
The institutions that safeguarded the old system are either already defunct or fast losing credibility.
The World Trade Organisation turns 30 years old next year.
The IMF is gripped by an identity crisis, caught between a green agenda and ensuring financial stability.
The UN Security Council is paralyzed. Supranational courts like the International Court of Justice are increasingly weaponized by warring parties.
Besides G7 and BRICS, other giant groups exist.
The Regional Comprehensive Economic Partnership (RCEP) for example, created in 2012. It has 15 countries including ASEAN and China.
The Shanghai Cooperation Organization, established in 2001. It has 9 countries including China, Russia, India and central Asian countries.
Indonesia is careful in choosing and joining groups.
Indonesia is the only Asean country member of the G20 and was even president of G20 in 2023.
Indonesia could easily join BRICS, but faithful to its historical non-alignment, it is not taking sides. For the moment.
Do you think Indonesia, the largest economy of Southeast Asia, will join BRICS?
Let us know at bonjour@cintasia.com !