The G20, G7 and BRICS in Global Economic Governance

Abstract

The Group of 20 (G20), established to overcome the 2008 financial and economic crisis, has asserted itself as the premier forum for international economic cooperation and the most representative and authoritative mechanism for coordinating positions and forging collective decisions on economic policy issues. Members of the Group of 7 (G7) and the BRICS grouping of Brazil, Russia, India, China and South Africa-the oldest club of developed industrial economies and the youngest club of the largest emerging economies-coordinate within the G20. It is argued that in the process of consensus building in the G20, advanced and developing countries form new ad hoc groupings on specific issues which temporarily supersede the existing alliances, such as the G7/8 and BRICS, and allow them to pursue decisions conforming to their national interests. This article reviews the positions of, and coalition building by, G7 and BRICS members in the process of forging decisions on issues historically central to the G20's agenda: international financial institutions reform, macroeconomic policy and financial regulation. The authors explore the role that BRICS and G7 alliances played in advancing their members' priorities in G20 decisions. Have ad hoc groupings of advanced and developing economies indeed replaced the traditional alliances? Was BRICS successful in using cooperation within the G20 to rebalance power and change the rules of the game in the global system? Has the G7 managed to maintain and consolidate its influence in the renewed system of global economic governance? What resources does BRICS possess to compensate for its deficit of influence on G20 decisions in order to achieve a more democratic and equitable multipolar world order and ensure sustainable, strong, balanced and inclusive growth? The findings show that, despite contradictions within the alliances and common interests between BRICS and some G7 members on a number of issues, ad hoc groupings of advanced and developing countries do not replace the existing clubs. The members of the G7 successfully use coordination within their club to resolve internal contradictions, develop a common position and jointly promote it in the G20. The G7 ensured the strengthening of the international financial institution (IFI) system, and its influence in it, through cooperation with new centres of power, allowing a slight increase in International Monetary Fund (IMF) and World Bank (WB) quotas and votes shares for BRICS, while still maintaining its control over the governance of IFIs. Both alliances influenced G20 decisions to stimulate economic growth while maintaining price stability and ensuring financial sustainability. On managing exchange rates, BRICS and the G7 acted as partners in the 1 The editorial board received the article in August 2018. The article draws on the results of the RANEPA project "Analysis of Opportunities for Aligning BRICS Countries' Positions on Key Issues of the Global Agenda," which explored the spheres of international finan cial and monetary system r...

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