Growth and dominance: How do the G7 and Brics match up?

A three-way split in the global economy has emerged between the two blocs and the rest of the world

The national flags of Brazil, Russia, India, China and South Africa. Bloomberg

At the turn of the century, former Goldman Sachs chief economist Jim O'Neill coined the term Bric, in a research paper that highlighted the growth potential of Brazil, Russia, India and China.

He saw the group as a rising force in the world economy, which could challenge the western club of richest nations.

South Africa, the smallest member in terms of economic power and population, joined the bloc in 2010 and the group became known as Brics.

Since its inception the Brics bloc has faced comparisons with the G7 on the basis of economic growth and other metrics while in recent years the rise of the bloc has drawn attention to its impact as a geo-political force.

Earlier this year Brazil, China, India, South Africa and Russia officially overtook the G7 in share of world GDP, a move that is likely to cement the bloc's standing as a premier global forum. Dozens of countries have lined up to join Brics and an estimated 40 nations have reportedly shown interest in closer alignment.

The Brics countries accounted for 32 per cent of global GDP against the G7’s 30 per cent. The rest of the world contributed the remaining 39 per cent.

The G7 is made up of traditional economic powerhouses – the US, Canada, the UK, Germany, France, Italy and Japan.

Going into the latest summit of the Brics in South Africa, China is proposing an expansion that would transform the association of disparate emerging economies. Chinese President Xi Jinping is urging fellow leaders to see themselves in the mould of the G7.

Commentators have said Beijing sees itself as the presumed leader of the group and would like to see an enlarged membership transform it into a China-friendly club.

"Despite disagreements among Brics members, they have been seen to have more in common than the western strategic community expected and all see an increase in multipolarity as something desirable," wrote the Chatham House analyst Yu Jie.

"As a result, all are expected to play a more active role in determining the current world order as well as increasing their leverage to deal with the US."

Given the head start advantage of western nations, there are close economic ties across the two groupings. Many of the G7 nations are also the biggest investors in the Brics and so too is China.

While China accounted for the single biggest share of global GDP in 2022, the G7 was ahead of the Brics on aggregate. Moreover economists point to the reliability of economic data from the two sides as another intrinsic advantage of the western bloc.

The Brics countries, with 3.24 billion people, account for 40 per cent of the world's population – while the G7's 0.8 billion makes up 10 per cent.

The Brics leaders were meeting in South Africa on Tuesday to discuss issues not only of membership but also strategies such as ways to reduce the US dollar's dominance in global trade.

The major emerging economies are pushing to assert their voice as a counterweight to western dominance in global affairs even as Brics is seeking answers to some of the issues that are affecting its evolution.