The G7 and NATO held their annual leaders’ meetings last week in Germany and Spain, respectively.
In June 2022, two groups of countries met for their annual summits in Germany and China. This was a big deal for the whole world. While the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union) met in Germany, the BRICS (Brazil, Russia, India, China, and South Africa) met in China for their 14th Summit.
The two groups are very different. The G7 is a group of mostly powerful Western nations that represent global leadership today. The BRICS are a group of powerful developing nations that want to have more say in both the developing and developed worlds. The BRICS countries are different from the G7 in two main ways: the number of people they serve (3 billion vs. 987 million for the G7, which includes the EU) and the economy they run. The G7 is a much bigger economy than the BRICS at the moment.
BRICS’ beginning In 2001, Jim O’Neill, the chief economist at Goldman Sachs, wrote an article called “The World Needs Better Economic BRIC.” In it, he said that Eurozone countries should probably make room for BRIC countries to join an improved G7/G8 at the centre of an improved International Monetary Fund and World Bank.
After that, he and some of his Goldman Sachs coworkers showed how important these countries may become for the world economy from an economic point of view. He suggested that the world’s emerging economies not be set up as a separate group, but instead be added to an expanded G-7. At the time, Russia had just joined the G-7, making it the G-8, but it was still different from the rest. The paper argued that by 2039, Russia, India, China, and Brazil would overtake the G-7 economies and change the way the world economy works.
During the BRICS summit, the most important thing that happened was when Russian President Vladimir Putin said that Brazil, Russia, India, China, and South Africa are working on a new global reserve currency. At the BRICS business forum, he said, “We are working on creating an international reserve currency based on a basket of currencies from our countries.” According to the president of Russia, the member states are also working on other ways to make international payments that are reliable. The group said that it was trying to set up a joint payment network so that it wouldn’t have to rely so much on the Western financial system. The BRICS countries have also been making it easier for each other to trade in their own currencies. The other big change is that Iran and Argentina might join the BRICS group. People think that Iran and Argentina are jumping on the bandwagon because they see it as a chance to build an alliance different from the one led by the West.
In the meantime, the other members of BRICS are urging them to join the club because they sense that tears is about to be spilled and because they perceive significant economic flaws being exposed by the rapid collapse of western sanctions against Russia. When taken as a whole, the expanded BRICS countries currently account for around 26 percent of the world’s total oil production and 50 percent of the world’s iron ore production, which is utilised in the manufacturing of steel. They are responsible for around 40% of the world’s corn production and 46% of the world’s wheat production respectively. If all of them were transacted in the new reserve currency, then that currency would abruptly become an essential component of the global economy.