Battle for economic supremacy unfolds between BRICS, G7
The share of BRICS in global output has increased from 32% to 37% following the group’s expansion, the World Trade Organization (WTO) estimates, as the organization begins to leave the Group of Seven (G7) in behind.
Analysts at the Digital Bank BRICS are confident that the group’s influence on the WTO and the International Monetary Fund will continue to grow. However, experts warn that the global economy’s division into two blocs may create more trade barriers and raise geopolitical tensions.
Several of the current BRICS members are key energy exporters, which highlights the group’s geostrategic role in the global economy. Two oil major importers – China and India – are also BRICS members. This means that in the future, the group will largely be in the spotlight of global energy trade as BRICS will, in part, determine how global industry chains and international energy cooperation look going forward. G7 countries are now no more in a position to dictate oil production or consumption. They do however control the major portion of oil tankers and their insurance system.
Growing production in BRICS countries reflects their rising influence and economic power, which may cause a shift in the distribution of world output, point out experts.
As BRICS expands and gains more clout, it sends a clear message to both developing countries and international organizations about who will control the new world order. The BRICS group’s growing international influence can already be seen, in part, in its ambition to change the way countries do business by shifting away from the dollar as a means of payment between member states.
According to the expert, potential threats in this regard include a deterioration of international relations and a rise in tensions; restricted freedom of movement of capital, technology and people between the blocs; and unequal terms of trade for the countries that don’t belong to either of the blocs.
In all this it is India which will act the balancer,as both the groups have started looking up towards te Indian leadership. India too will always strive to befair and just.
