The emergence of BRICS (Brazil, Russia, India, China, and South Africa) has resulted in tremendous consternation for the G-7 alliance. Why? It all broils down to the monetary position of each alliance. Currently, four of the five economies have foreign exchange reserves surpassing the combined foreign exchange reserves of the G-7(Canada, France, Germany, Italy, Japan, UK, and US) economies. Two of the five BRICS economies — being China and Russia – sit on the United Nations Security Council as permanent members. Both China and Russia are now both members of the WTO. Three of the G-7 economies — being France, UK, and the US – are permanent members of the United Nations Security Council. The population of the BRICS economies is about 3 billion people. G-7 alliance population is about 744,000,00 million.
Global investors are now investing in BRICS economies as these economies are the new emerging economies with middle-income consumers and boasting new consumers everyday. BRICS economies represent 40% of the global land mass in the world. For example, Brazil has replaced Italy and the UK as the 6th largest global economy. At a time when the European Union and the Euro are tettering on collapse or survival, BRICS economies are seeing phenomenal economic growth rates. BRICS economies also represent a very strong alliance of South-South dialogue in terms of trade. Recently, BRICS intra-trade stood at $230 billion. China, for example, is importing soy beans and iron ore from Brazil. Russia is exporting oil to both China and India with populations of 1.5 and 1.1 billion peoples in the world respectively.
BRICS economies have such a strong and focal presence – especially now at the IMF — to the point of calling for the US dollar to be replaced as the global reserve currency. In particular, Russia and China are the BRICS economies calling for this replacement.
South Africa and Russia are the largest platinum suppliers in the world. Both BRICS economies are the largest diamond supplies in the world. South Africa is the largest holder of chromium in the world, and the US relies on this strategic resource from South Africa to make stainless steel products.
Russia boasts the most potential of natural renewable energy resources of all BRICS economies due to its diverse, massive, and pristine landscape in many areas. Brazil has been utilizing hydroelectric power for over 3-4 decades now.
From the G-6 and G-7 forum beginnings in 1974, there was never a feeling that G-7 represented a multi-cultural, national, racial, and ethnic diversity of the world. In reality, G-7 only forged ahead the political, economic, and social agenda of Europe, the US, Japan, and Canada. However, the dynamics of the world are changing now. Europe is a small, compact continent with no strategic resources to speak of. Many European countries have reaped their economic success off the strategic resources and human labor of the developing world. Both the Democratic Republic of Congo and Kazahstan are each larger in land mass than the whole continent of Europe, and both of these countries boast far more resources separately than the whole continent of Europe. Without the once economically powerful United States, four (4) of the countries in Europe could not have moved forward economically and, particularly, militarily and geopolitical as well as geostrategically.
G-7 was once the grandmaster forum for dictating global trade and aid conditions and packages to the rest of the world, but that is no longer the case. The US government apparently sees no way out of its current budget deficit and $16 trillion debt crisis. The European Union is trying to put a happy face in front of an economic sinking ship. The US government and the European Union are running around scrambling to keep their economies afloat. It is a tall order considering G-7 economies are competing with the emerging economies of a 3 billion population demographics of BRICS for global investment resources.