Brics revamp presents challenge to leading role of G7

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Could yesterday’s announcement of the supersizing of the Brics group of countries be the moment that turned the world upside down?

By some measures, the revamped group, expanding beyond Brazil, Russia, India, China and South Africa to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, is far bigger than the G7 group of advanced economies.

The new Chinese-driven alliance would account for 47 per cent of the world’s population and 37 per cent of its gross domestic product, compared with 9.8 per cent of population and 29.8 per cent of GDP for the G7 (excluding the EU, a “non-enumerated” member of the group).

As global China editor James Kynge writes today, it would also possess the lion’s share of the world’s oil and gas reserves and a huge amount of other natural resources.

Beijing hopes the changes will give it the oomph it has long sought to reform international institutions, including the World Bank, the IMF and the UN and give more power to developing countries.

Even before this week’s announcement it was already clear that the existing world order was in the throes of a shake-up, as detailed in our series on the rise of the middle powers.

Fixed alliances are shifting to “à la carte” arrangements while Beijing is using its muscle to reduce the west’s influence and dethrone the dollar from its dominant position in international trade and finance. The development bank set up by Bric members is already planning to begin lending in South African and Brazilian currencies to cut reliance on the greenback.

There may be some wishful thinking at play. Although the enlarged group might be united in its response to the global sway of the G7, its members’ politics and economics are quite disparate: some are democracies, others autocracies, some favour non-alignment while others are outspokenly anti-west. There is also the risk that member nations become mere satellites of China.

Some are clearly in the ascendancy and others going in the opposite direction. We even had a neat metaphor this week in the shape of two rival attempts to land on the moon with spectacular success for India and disaster for Russia, adding to its international ostracisation over its war in Ukraine.

Nevertheless, Brics 2.0 represents the most influential bloc the developing world has ever produced, says Kynge. “There is a sense that after decades of accepting the west’s rules, the era of the ‘global south’ is dawning,” he concludes.

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