By: Gayathri Pramod Panamoottil, Research Analyst, GSDN

The rise of BRICS in 2009 with the initial four countries –Brazil, Russia, India, and China- aimed to create a platform for cooperation among emerging economies. South Africa officially joined in 2010 completing the grouping. These nations represent a diverse mix of regional powers, large populations, and significant natural resources giving them collective weight on the global stage and presenting a significant challenge to the traditional dominance of the G7 countries – the United States, Japan, Germany, the United Kingdom, France, Italy, and Canada. However, in a world on the edge of a geopolitical shift, a seismic shift has taken place. As Western nations scramble to maintain their powers a new alliance has arisen. From October 22-24, 2024 Russian President Vladimir Putin hosted a historic summit by uniting the founding members of the BRICS with five new powerhouses Egypt, Iran, Ethiopia, Saudi Arabia, and UAE.  The transition of BRICS from five to BRICS Plus in 2024 (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, United Arab Emirates, and Saudi Arabia signalizes the waning nature of Western dominance and challenging the rule-based order of G7 in many ways.  So, through this paper, I will analyze the possible way how BRICS can pose challenges to G7.

The rise of BRICS

The BRICS nations have emerged as major players in the global economy over the past few decades. One of the key reasons for the rise of the BRICS nations is their rapid economic growth. With their rapid growth and increasing influence, Brazil, Russia, India, China, and South Africa sought to establish a platform where they could coordinate their positions on key economic and political issues. By coming together, BRICS countries aimed to enhance their bargaining power in international negotiations and promote a more equitable and inclusive global economic order.  Traditionally speaking BRICS was considered a geopolitical counterweight to the West birthed from the ashes of the 2008 financial crisis. BRICS acted as a voice of the global south in the international domain.  Another important aspect that contributed to the formation of BRICS was the desire to challenge the dominance of Western powers in global institutions such as the World Bank and the International Monetary Fund. These institutions have traditionally been dominated by Western countries, which has led to a perceived lack of representation and voice for emerging economies. By forming BRICS, the member countries sought to create alternative institutions such as the New Development Bank to address the financing needs of developing countries and promote a more balanced and fair global economic system. 

Moreover, BRICS countries also recognized the benefits of closer economic cooperation and integration. By leveraging their collective strengths and resources, the member countries could explore new avenues for trade and investment, expand market access, and foster greater economic development. Through initiatives such as the BRICS Business Council and the BRICS Trade Fair, the organization aims to facilitate business partnerships and enhance economic ties among its members. Furthermore, the geopolitical dimension also played a significant role in the establishment of BRICS. The member countries share common concerns about issues such as global security, terrorism, and regional stability. By working together, BRICS countries can coordinate their efforts to address these challenges and promote peace and stability in their respective regions and beyond. The organization has also emerged as a platform for dialogue and cooperation on a wide range of global issues, including climate change, sustainable development, and governance reform.  The origins of BRICS can be attributed to a combination of economic, political, and strategic considerations. The organization represents a unique grouping of emerging economies with shared interests and goals, seeking to enhance their influence on the global stage and promote a more inclusive and equitable international order. As BRICS continues to evolve and deepen its cooperation, it has the potential to become a key player in shaping the future of global governance and economic development.

Challenges to G-7

Overall, the rise of the BRICS nations presents a significant challenge to the traditional dominance of the G7 countries. There was a golden time when G7 ruled the global economic stage with 45.5% of Global GDP in 1992 and BRICS was a mere 16.7%. Today there has been a momentous shift as BRICS nations account for 37.4% of Global GDP which indicates the dwarfing nature of the GDP of G7% up to 29.3%.  As BRICS expands it is challenging the established G7 along with G20 presenting a united front of nations determined to re-write the rules of International Governance. The expansion of BRICS signals a dramatic power shift on the world stage with the recent inclusion of energy-rich nations like Saudi Arabia and Iran. BRICS Plus stands poised to wield unprecedented influences over global energy markets.  Together these nations account for 43% of crude oil production and 32 % of natural gas output.  The BRICS nations have emerged as major players in the global economy, challenging the G7’s dominance in international trade, investment, and governance.

One of the key aims of BRICS is to create an independent payment system that utilizes the currencies of its member states to facilitate de-dollarization, thereby reducing the effects of Western sanctions that are intended to protect sovereignty, freedoms, and human rights. The initial phase of this initiative involves targeting essential international markets to enhance economic influence. A notable example of this strategy is BRICS’s engagement in the energy sector, where the organization seeks to establish a collaborative energy partnership among its members. With the recent addition of energy-rich countries like Saudi Arabia, Iran, and the United Arab Emirates, BRICS has the potential to exert a level of influence in the global energy market that rivals that of OPEC, thereby reshaping the landscape by controlling a substantial share of the world’s oil and gas resources. They have also formed a political and economic bloc, presenting a united front on key global issues. This has challenged the G7’s ability to act unilaterally and dictate the terms of global governance. As the BRICS nations continue to rise in prominence, they are likely to present an ongoing challenge to the dominance of the G7 countries in the years to come.

Similar to various global organizations, BRICS has acknowledged that artificial intelligence represents a pivotal advancement in technology, possessing the capacity to boost productivity, protect national and domestic security interests, influence public discourse, and heighten competitive dynamics. During the recent BRICS summit held in South Africa in August 2023, Chinese President Xi Jinping unveiled plans for the formation of an AI study group aimed at “developing AI governance frameworks and standards through broad-based consensus.” This group is charged with the responsibility of coordinating AI-related initiatives, promoting interdisciplinary research, and examining the ethical, social, and economic ramifications of AI technologies. Given China’s practices regarding AI, this initiative poses significant risks to the international order; the nation is known for its extensive surveillance and regulation of citizens via the social credit score system, its efforts to create deepfakes for propaganda purposes, and its influence over the development of international AI standards that prioritize state control over transparent governance.

Additionally, BRICS is focusing on the agricultural market, with the primary goal of developing an independent grain trading system proposed by Russia. Given that BRICS members represent 42 percent of global grain production annually, this initiative would enhance the group’s bargaining power regarding grain prices and counteract sanctions imposed by the United States and its G7 allies. Among the BRICS nations, China, Russia, and Iran have been particularly proactive in forming a security partnership, often referred to as the new triple axis. Since 2018, these three countries have conducted annual joint military maritime exercises to bolster regional security, promote multilateral collaboration, and demonstrate to the G7 that BRICS is consolidating its stance against Western military and political influence. The latest exercise took place in March 2024 in the Gulf of Oman, a crucial waterway for oil transportation in the Middle East and the sole maritime passage from the Indian Ocean and Arabian Sea into the Persian Gulf. This naval drill involved over twenty warships and included training in search and rescue operations, special joint tactical manoeuvres, and aerial exercises.

Strategies to mitigate the influence of BRICS

Three policy approaches are suggested to counter the initiatives of BRICS and protect the established international order from potential disruptions. The first approach emphasizes the creation of substantial economic trade agreements designed to deter actions that could undermine the current economic system. This can be accomplished by offering BRICS nations a trade agreement that includes significant financial incentives, thereby fostering closer ties with the United States and its G7 allies. Such a strategy would help reduce these countries’ alignment with the objectives of Russia and China.  South Africa is particularly well-suited for this agreement due to its neutral stance on BRICS issues and the growing importance of Africa as a focal point of economic interest and competition among global powers. The existing African Growth and Opportunity Act could be expanded into a more formal trade agreement, strengthening political and economic ties with Western nations. This would not only enhance trade relations but also create a platform for dialogue on shared values such as democracy, human rights, and sustainable development.  While South Africa is a prime candidate, similar agreements could also be pursued with other BRICS members like India or Egypt, which may be receptive to increased economic collaboration. India, with its burgeoning economy and strategic geopolitical position, could benefit from enhanced trade ties with the West, particularly in the technology and defense sectors. Egypt, on the other hand, could leverage its strategic location and historical ties to attract investment and support from Western nations, thereby reducing its reliance on BRICS partnerships.

The second policy recommendation emphasizes the importance of establishing a Western-led AI governance framework that garners global acceptance. This initiative is essential to undertake before China and BRICS make significant progress in this area. The pursuit of this framework has been ongoing since the G7 summit held in Hiroshima, Japan, in May 2023, where Prime Minister Fumio Kishida launched the Hiroshima AI Process. This initiative seeks to create a guidebook that upholds international norms, forming the basis for a G7 AI governance framework. A notable outcome of this effort was the introduction of the Hiroshima AI Process Comprehensive Policy Framework in December 2023. However, despite these advancements, the framework has not yet engaged with the global community. The subsequent vital step involves ensuring the interoperability of regulations within advanced AI systems, which will enable the G7 to uphold the rule of law, human rights, and democratic values.

This can be accomplished through the establishment of risk management protocols, governance guidelines, ethical frameworks, and consistent terminology and definitions. It is even strengthening multilateral institutions and frameworks that promote a rules-based international order. By reinforcing organizations such as the World Trade Organization (WTO) and the International Monetary Fund (IMF), the U.S. and its allies can ensure that global economic governance remains transparent, equitable, and responsive to the needs of all nations. This could include advocating for reforms within these institutions to represent the interests of developing countries better, thereby countering the narrative that BRICS nations are the sole champions of the Global South. Additionally, the U.S. could lead initiatives to create new coalitions or partnerships that focus on shared challenges such as climate change, public health, and cyber security. By positioning itself as a leader in addressing these global issues, the U.S. can attract countries that may feel marginalized by BRICS initiatives, thereby fostering a sense of collective responsibility and cooperation among like-minded nations.

The third policy recommendation highlights the necessity of enhancing military collaboration to tackle regional security challenges. The G7 must fortify security alliances with China’s principal military partners to diminish their collective operational effectiveness. A strategic emphasis should be placed on strengthening military ties with India, which, as of 2024, is recognized as the fourth most formidable military globally, following the United States, Russia, and China. The United States is already engaged in cooperative efforts with India through the Quadrilateral Security Dialogue, which includes Japan and Australia. Additionally, India’s intricate relationship with China, particularly following the 2020 border conflict that resulted in casualties on both sides, highlights the urgency for closer military collaboration. To enhance India’s operational capabilities, the G7 and the United States should consider initiating joint military exercises that cater to India’s unique requirements, such as mountain warfare training and the provision of specialized equipment to effectively address potential border incidents. This strengthened military partnership would not only improve India’s defense preparedness but also play a vital role in promoting regional security and stability. While fostering security partnerships with other BRICS nations like Saudi Arabia or Brazil may offer advantages, a more robust relationship with India through joint military exercises would be especially effective in countering the military influence of Russia and China.

Forecast

The implications of BRICS extend beyond economies. They reach into very fabrics of global governance. The G20 has long served as a platform for addressing global issues. But BRICS Plus threatens to divide it further with countries like India, Brazil, and South Africa holding membership in both groups, while BRICS Plus creates a unified block and it has the potential for fragmentation and increased tensions within G20 countries – having multifaceted and overlapping interests and identities.  Moreover, BRICS countries are playing tremendous roles in global security as they come together their collective influence extends beyond economies to address international security concerns through Joint Military Exercises and collaborative efforts to combat terrorism.

BRICS Plus is positioning itself as a vital player in the global security landscape. Further solidifying its relevance on the world stage BRICS is not just a club of emerging economies it challenges the status quo with initiatives like independent payment systems and AI governance frameworks.  BRICS Plus aims to reshape the landscape of international relations as they push for de-dollarization. Under such circumstances, the relevance of G7 is highly significant and worth addressing as we stand on the precipice of this new era of BRICS plus. There exists a huge shift in the power structure not only in the economic landscape but also as a whole. The current development in West Asia and the spike in oil and petroleum products is worth understanding. The new grouping can potentially act as a catalyst for managing the price hike through their creative bilateral dialogues and engagements. 

Conclusion                  

The BRICS coalition, which includes Brazil, Russia, India, China, and South Africa, is increasingly positioning itself as a formidable counterweight to the traditional dominance of the United States and its allies within the G7. This coalition, particularly under the leadership of China and Russia, is not merely a collection of emerging economies; it represents a concerted effort to challenge and potentially redefine the established rules-based international order that has been in place since the end of World War II. One of the primary strategies employed by BRICS is the creation of an autonomous economic system that operates independently of Western influence. This includes initiatives such as the New Development Bank, which aims to provide funding for infrastructure and sustainable development projects in member countries and beyond, thereby reducing reliance on Western financial institutions like the International Monetary Fund (IMF) and the World Bank.

By fostering economic cooperation among its members and promoting trade in local currencies, BRICS seeks to diminish the dollar’s dominance in global trade, which has been a cornerstone of US economic power. In addition to economic initiatives, BRICS is advocating for a governance framework for artificial intelligence (AI) that could disrupt existing global standards. As AI technology continues to evolve and permeate various sectors, the establishment of a BRICS-led framework could challenge the norms set by Western countries, particularly in areas such as data privacy, ethical AI use, and regulatory oversight. This shift could lead to a fragmented global landscape where different standards coexist, complicating international cooperation and potentially leading to a race to the bottom in terms of regulatory practices.

Moreover, BRICS is actively building military alliances and enhancing defense cooperation among its member states. This includes joint military exercises, arms trade, and strategic partnerships that could alter the balance of power in various regions, particularly in Asia and Africa. The military collaboration among BRICS nations not only serves to bolster their collective security but also sends a clear signal to the West that they are prepared to defend their interests and assert their influence on the global stage. In light of these developments, the United States and its allies face a critical juncture. To effectively counter the challenge posed by BRICS, they must undertake a series of proactive measures. Establishing strategic trade agreements that enhance economic ties among like-minded nations can help to counterbalance the economic initiatives of BRICS. These agreements should focus on fostering innovation, ensuring fair trade practices, and promoting sustainable development. Additionally, the formulation of a universally recognized AI governance framework is essential. In response to this challenge, the United States and its allies must undertake proactive measures, such as establishing strategic trade agreements, formulating a universally recognized AI governance framework, and enhancing security collaborations with the key BRICS nations. Neglecting these actions could lead to a reduction in US influence and threaten the stability of the international order that has historically upheld global peace. The US and its allies should lead efforts to create standards that prioritize ethical considerations, transparency, and accountability.