The politically inspired intergovernmental Economic Group, G7, was born to expand the market economy, their basis for rapid growth. It emerged to respond in a coordinated manner to threats, such as energy security and others. The group comprises countries seen as the richest, with a total population of 780 million: Canada, France, Germany, Italy, Japan, United Kingdom and the United States.
The combined GDP of the G7 countries was $44.64 trillion in 2022. They comprise about 10% of world's population and account for almost 30% of GDP measured in purchasing power parity (Statista).
More recently, the BRICS emerged as a counterweight to the world order dominated by the US and its Western allies. The BRICS are an alternative global mechanism promoting economic and social growth, especially when international institutions are tense.
The BRICS countries comprise Brazil, Russia, India, China, and South Africa, with a population of 3.3 billion, China and India having 1.4 billion each, and the other three having around 420 million. The combined GDP of BRICS countries is over $60 trillion, higher than that of the G7 countries. Some others expressed their interest in integrating the BRICS.
It is surprising to see how the position of the so-called Western countries (the G7), once considered all-powerful – when nothing was done without their consent or approval, dominating and exploiting third world countries – is today being surpassed by some previously colonised ones. Naturally, no one wants to lose their position of prominence, seeking to continue to say the last word on various matters, as do the ruined nobles who do not give up on imposing a particular image and exercising the special rights defined for them.
Old colonies: With suffering and loss of many human lives, almost all countries freed themselves, first from the colonisers, gaining autonomy to organize and overgrow in the economic sphere, and then focusing all their attention on food, education, healthcare, promoting Agriculture, Manufacturing and Services, for the good of their citizens.
Some have taken giant leaps in vital areas like Intellectual, Scientific and Technological spheres. Still, others freed themselves from economic systems that oppressed them, moving towards free initiative systems (as India) with a call to all citizens to participate in the country's recovery.
Economic and other improvements: In poor and exploited countries, when there is a specific amelioration in economic aspects, all sectors can evolve quickly, given the availability of financial resources.
Until a few years ago, it was the G7 that dictated the rules and set the agenda for action. Today, BRICS has growing importance, with ample reach, representing a population almost three times the population of the G7. It has a rapidly growing economic power and an increasingly important role in science and technology.
For a long time now, no country could fail to take China as a reference for growth during a dazzling period of impressive progress from the 1990s to 2020 due to its advances in manufacturing and building of high-class infrastructures.
China began to slow down about four years ago. At the same time, India and other smaller Asian nations continued consistently at their pace, albeit with less but consistent growth rates (6.5% per year in India).
China and India were constantly looking at each other. Could India grow at the same pace as China? India's long stagnation, due to its economic model copied on the one of the Soviet Union, from independence to 1991, with a centrally planned economy, contrasted with China's, which from 1980 was lively and liberal in its economy, although authoritarian and centralised in its politics.
Good governance is crucial : A country's governance is vital for its development. Generally, when people have initiative and capabilities, allowing them work within the political frame is the best solution. The worst seems to be of a government, even democratically elected, wanting to impose ideology-based policies that the people do not support and end up destroying the country's initiative and economy. I am thinking of Venezuela and Argentina till some years ago.
When, in addition to democratic choices, the government wants the best for the citizens and the country, creating attractive conditions to launch initiatives and take risks is the best way to move the country forward. The creativity of citizens, combined with their capability for entrepreneurship, is definitively the lever to get any country moving fast to unimagined situations.
G7 and BRICS must help others: The two major groups want to present themselves as an alternative to each other. Still, it would be in the interest of the poorest populations worldwide that they collaborate and align their objectives to help all countries, especially those in Africa, Latin America and Asia, achieve good development.
In Africa, the exploitation of the colonisers and the forcible imposition of the new organisation modeled along the lines of the colonising country, with the invention of slavery and apartheid, the dominators ended up destroying the social fabric. "They sold" more than 12.7 million enslaved people to send to America and left Africa irreparably destroyed, with a social organization that had nothing to do with their traditional one.
Therefore, it seemed logical that the G7, mainly composed of former colonisers, should pay decisive attention to helping Africa. The way to help must be simple but effective: buy them (each to their ex-colony) what they produce in agriculture or industries and invest in them to create and export more and more. The best way of helping any country is trading with it!
The BRICS, along with Spain, should pay more attention to South Hemisphere countries (Latin America and South Asia, namely the Philippines) and trade with them so that they can reach high levels of development.
Hopefully, the Group of Twenty (G20) appeared as a forum for international economic cooperation between the world's leading economies. It was established in 1999 to discuss economic and financial issues. The G20 has since expanded its focus to include climate change, trade, and sustainable development.
Besides what one country does by its initiative to help others, with some coordination of actions, the global impulse could help developing countries to grow quickly, strengthening local institutions to become protagonists of stability. And promote high-quality education, which will, in some time, prepare professionals to serve the population in healthcare and wealth creation.
It would be engaging the G20 in its meetings to review the progress in helping and sharing positive experiences that countries individually had in supporting them. The recent G20 Joint Finance and Health Ministerial Meeting in Rio de Janeiro highlighted the potential of the swaps (debt-for-health) to alleviate debt burdens while strengthening health systems.
(The Author is Professor at AESE-Business School (Lisbon), at I.I.M. Rohtak (India), author of The Rise of India)