Growth in BRICS: Friend or Foe to the West?

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As the 15th BRICS summit opens in Johannesburg, this group of so-called “emerging” countries has never been so powerful in economic terms. If they want to overshadow the Western powers, the BRICS are a heterogeneous group that struggles to speak with one voice.
“It’s no longer the developed world and the developing world. It’s an uphill world and a downhill world.” The sentence pronounced last March by journalist George Mack on Twitter caused a stir.

Because it is in 2022 that the curves crossed between the G7, the club of the 7 most industrialized countries on the planet (Germany, Canada, United States, France, Italy, Japan and United Kingdom) and the emerging countries BRICS grouping together Brazil, Russia, India, China and South Africa.

This last group, according to data from the British institute Acorn Macro Consulting, now weighs 31.5% of the world’s GDP in purchasing power parity when the G7 represents “only” 30.7% of the wealth created on the planet. At the beginning of the 1990s, the group of former industrial champions still represented 45% of the world’s wealth, three times more than the Brics who barely exceeded 15%.

And the gap should continue to widen. The relative weight of the G7 should, according to Acorn, continue to decline and fall well below 30% by the end of the decade, while that of the Brics should, according to these same forecasts, come close to 35%.

Invented in 2001 by Goldman Sachs, the term Brics was initially the informal qualifier given to rapidly growing emerging economies. But since 2009, the countries have decided to structure themselves and meet at annual summits like the one that begins this Tuesday in Johannesburg, South Africa, in order to counterbalance American power on the world stage.

This “club of five” promotes the recognition of a multipolar global economic and political balance, breaking with the organizations inherited from the post-Second World War such as the World Bank and the IMF. The medium-term objective of these countries, which represent 18% of world trade, is already to do without dollars in their trade.

Critics vis-à-vis the predominance of the greenback in international trade, one of their subjects of reflection revolves around the means of freeing oneself from the dollar. Brazil and China concluded a bilateral agreement at the start of the year to settle their trade in their local currencies.

A real attraction

An autonomy that these new powers want to acquire by activating the levers of soft power, ie influence on the international scene. The Brics thus announced last month their desire to create their own international ranking of universities, during a summit of education ministers in South Africa. Moscow believes in particular that Russian universities are excluded from certain international rankings for political reasons.

The attractiveness of these young powers is already established. Since twenty countries have asked to join the BRICS, whose economic growth is mainly driven by China and India, and as many have expressed their interest, according to Pretoria last month.

Iran, Argentina, Bangladesh and Saudi Arabia are among the contenders. One of the factors of attraction is notably the creation by the Brics of a New Development Bank (NDB) whose ambition is to offer an alternative to the World Bank and the IMF. The structure, headquartered in Shanghai, has invested $30 billion since its inception in 2015, in infrastructure and sustainable development projects in member states and developing economies.

If the economic power of the Brics is real, there is still a long way to go before taking the place of the G7 in the world. Firstly because the strength of these economies is above all demographic with a total population of 3.2 billion inhabitants. GDP per capita is on average 8,000 dollars within these countries in 2022 when it is close to 50,000 dollars within the G7. The middle class of these emerging economies is still far less wealthy than that of Western countries. The Brics are also mostly dependent on Western populations to sell their products.

Significant political differences

The power of the Brics is also closely linked to the rapid growth of Asian economies. Since 2013, growth in Brazil, South Africa and Russia has averaged 1%, a slower pace than the G7 economies. Only China and India today deserve the qualification of countries with rapid growth with an average of 6% over the last decade.

In addition, the political differences within the Brics are much greater than within the western club. The powers of the G7 are all liberal democracies united for the most part within military organizations like NATO. If there can be commercial rivalries between the United States and the European Union for example, on the side of the Brics the regimes are much more heterogeneous and the interests diverge.

Between Indian democracy, the Russian autocracy banished from the international community since the war in Ukraine or even the Chinese regime without political freedom, the Brics avoid political subjects when they meet and have no model to offer. other than economic development.

This article is originally published on bfmtv.com

 

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