"The emerging economies alliance BRICS+ is currently meeting for the first time.
With eleven members, it now represents half the world's population.
An IW economist explains whether it can form a counterweight to the West—or whether it will collapse due to internal tensions.
Even before Donald Trump's election as US president, the previous unipolar world order was beginning to falter. This trend is now accelerating dramatically, as the United States under Trump is dismantling the global institutions and rules that it itself has decisively shaped. Old alliances, such as within NATO, as well as close trade alliances with Canada and Mexico, are being called into question.
The Group of Seven (G7), the group of seven leading industrialized nations that represents Western interests, also appears increasingly paralyzed. There is even a risk of a split. At the same time, the economic power of the USA is eroding. The tariffs threatened on April 2 have called into question the USA's status as a safe haven for investors. Furthermore, the status of the dollar as a reserve currency is coming into question.
This complex situation is accelerating the shift toward a multipolar world order. The BRICS+ alliance (Brazil, Russia, India, China, South Africa, plus other countries), which has been expanded by six states, can use its independence from the United States and its role as representative of the so-called Global South to move into the power vacuum.
From July 6 to 7, the expanded BRICS+ alliance will meet for the first time in Rio de Janeiro, Brazil. It now comprises eleven members. Ethiopia, Egypt, Iran, Saudi Arabia, the United Arab Emirates (UAE), and Indonesia have joined. It thus represents approximately 28 percent of global economic output (at current prices and exchange rates) and approximately 48 percent of the world's population.
BRICS was originally intended to serve as a collective term for emerging economies. The economic perspective was clearly the primary focus. However, the new member states will only slightly increase the alliance's economic output by 3.6 percent.
The new Expansion should therefore be understood more from a geopolitical perspective. The focus is shifting toward a counterweight to the West and thus toward a potential opponent of the G7 – the alliance of the North American states of the USA and Canada with the four European countries of Germany, France, Italy, Great Britain, and Japan.
For as diverse as the members may be, they all agree that they reject Western dominance, for example, in the United Nations Security Council, but also in the institutions of the Bretton Woods system, the World Bank, and the International Monetary Fund (IMF). BRICS+ is one of the few dialogue formats and global platforms for the interests of the Global South. Although the success of these efforts has been rather mixed so far, the alliance is partly challenging the existing Western-dominated global order.
Tensions within the Alliance
Nevertheless, skepticism is warranted due to the great heterogeneity within the alliance. The economic gap is, for example, enormous: While the economic output (in purchasing power parity) in the UAE is around $68,000 per capita In Ethiopia, the price is just $3,000.
Tensions are also likely to increase in the political sphere, for example, with regard to events in Ukraine and the increased sanctions against Russia. The stance of India and Brazil in this conflict is at least ambivalent, with both avoiding a position in favor of their ally Russia.
The tensions between Saudi Arabia and Iran over dominance in the Middle East are also unresolved. The conflict between Israel and Iran is increasing volatility in the region.
Of particular relevance to the alliance are the tensions between the two largest member states, India and China. While they recently reached an agreement on the border dispute, the recent military conflict between India and Pakistan has demonstrated how fragile the situation in the region is. China is on Pakistan's side and also supports the country militarily. India's participation in the G7 summit in Canada in mid-June demonstrates that it will not allow itself to be strategically tied to a China-dominated BRICS+ group.
Economically, Donald Trump's trade policy is driving a wedge between the two countries. India is trying to position itself as an alternative supplier to China in global supply chains, which is encountering resistance in China. Both countries are striving for a leadership role, not only within the BRICS+ alliance, but also globally. However, China has stumbled economically since the coronavirus pandemic. Furthermore, demographic problems are becoming apparent in the country.
In contrast, India benefits from a demographic dividend thanks to its young population and surpassed China as the world's most populous country in 2022. Economic growth in India also appears comparatively robust. According to the IMF forecast, the country is even expected to become the fourth-largest economy by the end of this year, just behind Germany.
More against something than for something
How united the BRICS+ alliance can appear is therefore unclear due to its great heterogeneity and the open question of leadership. However, this will largely determine the extent to which it can be taken seriously as a power factor.
So far, the BRICS+ countries have been less successful in signaling what they stand for, but rather what they oppose: continued Western dominance in global governance.
European countries, including Germany, should strive for a more differentiated dialogue and give the partly legitimate interests and demands of the BRICS+ a greater global voice. This is the best way to ensure that anti-Western tendencies do not prevail within the BRICS+. In the best-case scenario, the alliance states will develop into an important and recognized player in the new multipolar world order – which, in turn, will assume more responsibility for solving global problems, in line with their greater role.
Samina Sultan is Senior Economist for European Economic Policy and Foreign Trade at the German Economic Institute in Cologne.” [1]
BRICS' Strengths:
Economic Growth:
BRICS countries, particularly China and India, have experienced rapid economic growth, and their combined GDP at PPP has surpassed that of the G7.
Population and Market Size:
BRICS has a significantly larger population than the G7, representing a vast market for goods and services.
Resource Potential:
Several BRICS countries, like Russia and Saudi Arabia, are rich in natural resources, including oil and gas, which gives them economic and political (Western sanctions on Russia don’t work) leverage. What do you want to do about it? 500 percent tariffs on imported avocados? Good luck to you with your youths devoted to the avocado sandwich.
Growing Influence:
BRICS is actively working to reshape the global order and challenge the dominance of the G7 and the West, particularly in areas like finance and trade.
G7's Strengths:
Technological Advancement:
The G7 countries, particularly the US, Japan, and Germany, are global leaders in technology and innovation. This goes only so far (remember - Chinese DeepSeek is smarter in math, sciences and technology).
Military Power:
The G7 used to have some of the world's most powerful militaries, giving it a significant advantage in security and defense that in an age of military drones is worthless. Israel doesn’t know what it hit in Iran even today. In age of drones you need a massive number of boots on the ground to do anything since these boots are eliminated by drones at a staggering speed. Western boots don’t want to go there.
Global Influence:
The G7 has a long-standing history of shaping global norms, institutions, and policies, giving it a strong network of allies and influence.
Financial Stability:
The G7 countries have robust financial systems and institutions, making them major players in global finance.
Future Outlook:
BRICS' Continued Growth:
While BRICS' growth has been impressive, its economic trajectory is still heavily influenced by China and India.
G7's Adaptability:
The G7 is also undergoing changes and is actively addressing challenges like climate change and economic inequality.
Potential for Cooperation:
There's a possibility of cooperation and collaboration between BRICS and the G7 on certain global issues, rather than a complete takeover by BRICS. Hubris of the G7 stands in the way of this.
Conclusion:
BRICS' rise is a significant development that is reshaping the global landscape and challenging the established world order, as the case of Ukraine shows.
1. Wird BRICS+ mächtiger als die G 7? Frankfurter Allgemeine Zeitung; Frankfurt. 07 July 2025: 18. Von Samina Sultan
Komentarų nėra:
Rašyti komentarą