As we all know, G7 or Group of Seven (founded in 1975) is an informal grouping of seven of the world’s advanced economies, namely United States, Japan, Germany, United Kingdom, France, Italy, and Canada, organised around shared values of pluralism, liberal democracy and representative government. BRICS, on the other hand, is an association of five major countries including Brazil, Russia, India, China and South Africa, formed in 2010. BRICS has sought to improve diplomatic coordination, reform global financial institutions and in due course, serve as a counterbalance to Western domination.
Earlier in August this year, BRICS announced that the group is set to add in 6 new member states i.e. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UEA in 2024. Based on the GDP projection for 2023 from International Monetary Fund (IMF), G7 hold 43% of the world’s GDP with the bloc represent over USD45.9 trillion in GDP whilst BRICS hold a combined GDP of USD27.6 trillion, representing 26% of the global total GDP. With the new members included in 2024, the expected GDP will climb slightly to USD30.8 trillion or around 29.3% global share.
The expansion of the group’s economic power will rise the overall GDP of the BRICS group, but not enough to replace G7’s share in the global GDP, notwithstanding, the gap is growing narrower and likely to shrink in the near future. The new entrant to BRICS will add USD3.1 trillion of GDP to the bloc, thanks for Saudi Arabia contributing the most of its GDP of USD1.1 trillion. The following is the current ranking based on countries’ GDP for G7, BRICS and New Members to BRICS:
New Members and Its Contributions
The six new members that will be joining BRICS in 2024 are all considered to be developing economies and hence, their addition to the group is not expected to have major impact on the bloc’s overall share of GDP. However, the new addition will further enhance the global population represented by BRICS by having Ethiopia (126.5 million population) and Egypt (112.7 million population) in the group, pushing the total share of global population represented by BRICS to 46%. Better still, BRICS could eventually surpass 50% of global population in the future as many more countries have expressed their desire to join the bloc.
While the global push to reduce reliance on fossil fuels continues, the immense size of the global oil market persists, and the BRICS nations are poised to significantly increase their influence within it. This is primarily a result of Saudi Arabia’s inclusion, as the country alone contributes 12.9% of the world’s total oil production.
According to data from the 2022 Energy Institute Statistical Review of World Energy, the BRICS group’s share of global oil production is expected to expand from 20.4% to 43.1% with the addition of new members. It is important to highlight China’s ongoing efforts to promote the use of the yuan as the currency for oil trade, and the admission of Saudi Arabia into BRICS could potentially bolster this endeavour, thereby altering the dynamics of global oil trade.
Based on 2022 information from the World Trade Organization, the expansion of BRICS is projected to increase the group’s portion of global exports in terms of merchandise trade to 25.1%, up from the previous 20.2%. The new members’ addition has a minor contribution to the global export share while China, being part of BRICS, still holds the title of the world’s largest exporter. Other significant exporting nations not belonging to BRICS include the United States (8.3%), Germany (6.6%), the Netherlands (3.9%), and Japan (3.0%).
Other In-coming Members
As reported by Reuters, more than 40 nations have indicated their interest in becoming part of BRICS. However, a smaller subset comprising 16 countries has taken concrete steps to seek membership, including Algeria, Cuba, Indonesia, Palestine, and Vietnam. With the group’s expansion, potential differences in opinions and priorities among its members may give rise to future tensions.