The G7's historical evolution can be traced back to the 1970s when the world faced
multiple economic crises. It includes the collapse of the Bretton Woods system and the
oil shocks of the decade. Recognising the need for coordinated action, the leaders of six
major economies -USA, UK, Germany, Japan, France, and Italy - convened for
discussions on global economic stability. Canada joined shortly afterwards, forming the
Group of Seven (G7). The G7 became a platform for these countries to discuss and
coordinate policies on international trade, finance, and security, exerting significant
influence over global economic institutions such as the International Monetary Fund (IMF)
and the World Bank.
On the other hand, BRICS emerged as a response to the growing economic and political
influence of countries outside the traditional Western sphere. The term “BRIC” was first
coined by economist Jim O’Neill in 2001 to highlight the rising economic potential of
Brazil, Russia, India, and China. South Africa was added in 2010, completing the BRICS
grouping. Unlike the G7, which was primarily formed by developed economies, BRICS
consists of emerging economies from diverse regions. These nations recognised the need
to create an alternative framework for global cooperation, emphasising multipolarity,
development finance, etc. BRICS countries collectively account for a noteworthy portion
of the world’s population, GDP growth, and trade, positioning themselves as a
counterbalance to the G7's influence (Economist Intelligence Unit, 2021).
The structure and decision-making processes of the G7 and BRICS reflect their different
origins and objectives. The G7 operates as an informal forum with no permanent
secretariat or formal treaty. Decisions are typically reached through consensus. The
meetings focus on key global issues like economic policy, security, and climate change.
Despite its informal structure, the G7 has maintained significant influence through its
coordination with global institutions like the IMF, the World Bank, and the World Trade
Organization (WTO). However, critics argue that the G7's membership is limited and does
not reflect the diverse realities of the global economy.
In comparison, BRICS has sought to institutionalise its cooperation by establishing formal
structures, including the BRICS Summit and the New Development Bank (NDB).
Decision-making within BRICS is also based on consensus, but the bloc emphasises equal
partnership among its members, regardless of their differing economic sizes and political
systems. This approach highlights BRICS' commitment to promoting inclusivity and
reducing the dominance of any single nation within the group. However, the bloc faces
internal challenges, such as balancing the competing interests of its members, which
range from authoritarian to democratic governments and from resource-exporting to
technology-driven economies.
The objectives and missions of the G7 and BRICS further explain their differing priorities
in global governance. The G7's core mission has been to promote economic stability,
liberal democracy and the rule of law. Over the decades, the G7 has focused on
addressing global challenges such as financial crises, terrorism, and climate change. Its
influence extends to shaping global financial regulations, promoting free trade, and
providing development assistance to poorer nations.