Challenging The G7 – The Emergence Of The Global SE8
BRICS plus nations in the Global South could represent a sea change in the West’s global institutions
By Chris Devonshire-Ellis
The West has traditionally dominated global groupings of leaders, most notably the G8, which included Russia until 2014 and is now the G7. That is an inter-governmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, with the European Union is a ‘non-enumerated member’.
As of 2020, the collective group accounts for over 50% of global net wealth (US$418 trillion), 32 to 46% of global GDP, and approximately 770 million people, or 10% of the world’s population.
The G7 is officially organized around shared values of pluralism and democracy. However, there is increasing resistance to the body as unrepresentative of the world as a whole – 90% of the global population is unrepresented by the G7 yet its economic power is such that it is able to dictate global policies to its own advantage. This has lead over the past few years to increasing alarm at what other countries, not purely limited to China and Russia, have called a ‘unipolar’ society that excludes all other nations. That has only developed as non-G7 countries themselves have begun to be globally economically powerful. A movement to develop an alternative, or to alter the G7 to become more inclusive now appears to be gathering steam.
The original BRICS grouping would appear to be the logical forerunner, comprising of Brazil, Russia, India, China and South Africa, the BRICS covers five significant landmasses as opposed to the G7’s three, and includes rather more people – 3.22 billion, or 41.2% of the global population. These five states had a combined nominal GDP of US$19.6 trillion, and about 23.2% of global GDP. However, when measured against PPP values, that increases to about US$40.55 trillion, or 32% of the world’s GDP PPP. However, by IMF estimates, the BRICS nations will account for over 50% of global GDP by 2030, while the combined Asian, African, Middle Eastern and Latin American geographies will account for roughly 50% of global wealth – albeit not as concentrated as within the G7.
That concentration creates issues: according to Credit Suisse, the world’s top 1% control 50% of global wealth, with about 40% of that 1% being held in the United States and about 30% within the EU. Ergo, based on wealth and democracy, they control what happens and dictate policies that affect the rest of the world – despite only possessing 10% of the global population. This gives a clue as to why the United States and European Union especially have teamed up to impose sanctions on Russia. They view their collective might as being able to bend other nations to their will – a truism regardless of the circumstances surrounding the reason why.
Except it hasn’t quite worked out like that.
The G7’s weakness is in it relatively low population base – 10% of global total. That inhibits growth potential and the physical ability to produce. While it is rich, it cannot survive just by churning its own wealth around – that combined wealth needs to invest in order to grow – and the growth rates in the non-G7 nations, with their fair larger share of both human resources and land mass, including the commodities within them – are far larger. The BRICS countries alone possess 26.7% of the global landmass against the G7’s 15%.
These strengths instead belong to the BRICS, and to countries that may easily become allied to it. These include Turkiye, Indonesia, and Mexico – amongst others.
Turkiye is a strong trade partner with both China, India and Russia, and is strategically positioned as a gateway between Europe and Asia with strong supply chain connections. It has been a member of the Belt and Road Initiative since 2015, and is a dialogue partner of the Shanghai Cooperation Organisation. It has been holding discussions with Russia over a Free Trade Agreement with the Eurasian Economic Union and would become a key members of a new BRICS style bloc with a population of some 84 million and a GDP of US$720 billion – and is expecting to become a trillion dollar economy by 2028.
Indonesia is also a member of the Belt and Road Initiative, and of ASEAN – and as such would incorporate elements of the ASEAN group into a re-aligned BRICS. It has Free Trade with China and India, and is negotiating one with the Eurasian Economic Union (as is India). Indonesia has a population of some 273 million and is already a trillion dollar economy.
Mexico is not a member of the Belt and Road Initiative and instead has a Free Trade agreement with Canada and the United States. However, that is viewed by many in the Mexican parliament as exploitative – while China has invested heavily into the countries ports and related infrastructure – it sees Mexico as a gateway to Latin and Central America. Mexico’s trade with China jumped 41% in 2021 to reach US$87 billion, while trade is also up with Russia and India. The country has a population of 128 million and is also a trillion-dollar economy.
Meanwhile, countries such as Argentina, with a GDP of US$383 billion, Egypt, with US$363 billion and the Gulf nations are all interested in an expanded BRICS bloc – an issue acknowledged by Russia’s Foreign Minister Sergey Lavrov just recently, saying that “Our BRICS association is an example of a true multilateral and multipolar diplomacy, which meets the realities of the 21st century. Its member states play an important role in the formation of a positive and future-oriented global agenda.”
While the makeup of an expanded BRICS as yet remains in the future, it is likely that the current members would look to cement ties with additional members being in the Global South, which includes Latin America, Asia, and Africa and which would illustrate the growing imbalance – and relative importance of the G7. To that end, I suspect an adequate name for such a revised grouping would the South-East Eight, or SE8, taking in any permutation of the existing BRICS nations as well as any of the countries mentioned above – addition to heavily sanctioned nations such as energy-rich Iran and Venezuela.
Should an amalgamation of the BRICS with the Shanghai Cooperation Organisation – which includes much of the Islamic Middle East, North Africa and Central Asia become involved, then the G7, wealthy as it is, may also find itself being dictated to by the very countries it has thus far excluded – and which crucially, despite their status, possess the far larger quantities of energy reserves.
How the mooted SE8 evolves remains to be seen – however the process of its formation, in whatever format it takes, is already underway.
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email email@example.com or visit us at www.dezshira.com