1. Meeting this week, the Western-led G20 was created to shape a global rule/world order.
2. This year Russia and China did not attend in a full capacity, and have tilted their emphasis toward BRICS+.
3. While for 30 years G20 countries represented 80% of the global economy, it’s only 58% excluding Russia and China—and BRICS+ is now 36%.
4. In terms of contributions to global economic growth, BRICS+ has already caught up to the G20 – excluding Russia and China.
5. Together, the expansion of BRICS+ and the changes at the G20 indicate a shift toward a multipolar world.
1. Meeting this week, the Western-led G20 was created to shape a global rule/world order.
The G20 was formed in 1999 in response to a cascade of financial crises that started with the Asian Tigers financial crisis of 1997, spread to Russia in 1998, and finally resulted in the collapse of the American hedge fund Long Term Capital Management. The finance ministers of the United States and Canada agreed that the old G7 framework that was integrated into the postwar Bretton Woods architecture was no longer sufficient to deal with global economic issues.
Yet as time went on, the G20 was used less as simply a vehicle for countries to discuss economic and financial problems, and more as a forum where norms of global behaviour were established. For example, at the G20 summit in Pittsburgh in 2009, President Barack Obama used his role as host to communicate to Iran that if they continued their nuclear program, they would be subject to more sanctions. Again in 2013 when the summit was held in St. Petersburg all 20 leaders recognised that the Syrian government had used chemical weapons in August of that year and that the country should disarm these weapons of mass destruction.
2. This year Russia and China did not attend in full capacity, and have tilted their emphasis toward BRICS+.
This week’s G20 summit in New Delhi will not be attended by either Russian president Vladimir Putin or Chinese president Xi Jinping. President Xi’s decision not to attend the G20 is likely a signal to the world that the Chinese are no longer convinced of the viability of Western-led global forums. If this analysis is correct, it should be fruitful to compare the new BRICS+ formation to the G20 excluding the countries that are not attending or fully participating this year: China and Russia.
3. While for 30 years the G20 countries represented 80% of the global economy, it’s only 58% excluding Russia and China—and BRICS+ is now 36%.
The first chart shows the percentage share of the world economy taken up by the G20, the G20 excluding Russia and China, and the new BRICS+ institution.
The G20 has made up around 80% of the global economy for over thirty years. But if we exclude Russia and China, the G20 has declined from comprising 73% of the world economy in 1990 to 58% today. Over the same period the BRICS+ economies have gone from making up around 20% of the global economy to around 36%.
4. In terms of contributions to global economic growth, BRICS+ has already caught up to the G20 – excluding Russia and China.
It is also interesting to look at which organisations are now contributing to global economic growth. In the chart and table below, we compare weighted share of global PPP-adjusted GDP growth for the BRICS+ bloc and the G20 excluding China and Russia bloc.
5. Together, the expansion of BRICS+ and the changes at the G20 indicate a shift toward a multipolar world.
Up until the financial crisis in 2008, the G20 excluding Russia and China accounted for almost double the growth that the BRICS+ bloc accounted for. But since the global financial crisis, the two blocs have been contributing roughly the same amount of growth. While the G20 excluding Russia and China may have a higher proportional share of GDP than the BRICS+ bloc, the latter has already caught up in terms of contribution to global economic growth.
Coming on the heels of the BRICS summit in Johannesburg last month, where six new members were added to the group, it appears that while Western-led organisations like the G20 are in decline, while non-Western-led organisations like the BRICS+ are growing. While these developments are being driven in the short-term by geopolitical shifts that have followed from the Russian-Ukraine war, at a deeper level they are the result of changing economic dynamics in the world system.
With research contributions from Philip Pilkington and Gladden Pappin