Since 2013, when China´s gross domestic product (GDP) surpassed that of the United States, its economy has been the world´s largest by this measure. Since 1960, on a basic social benchmark, China has added fully 45 years to average life expectancy at birth, compared with 6½ years for the US, and now enjoys a two-year lead at 78 years.
Widening the panorama, how does the G7 group, led by the US, compare with the ‘BRICS’, led by China, on a range of indicators?
Incomes and growth
With a population of 3.2 billion—and shortly to be expanded—the BRICS (Brazil, China, India, Russia and South Africa) outnumber the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the US) by a factor of four. Even so, the BRICS’ aggregate gross national income (GNI), adjusted for comparative purchasing power, is only marginally greater than that of the G7—$42.4 trillion compared with $42.1 trillion. Per capita it therefore amounts to about a quarter of the G7 equivalent. The lowest per capita GNI figure among the G7 (Japan) is more than a third larger than the highest among the BRICS (Russia).
The average annual growth of per capita GDP during 1990 to 2022 (constant 2017 international US dollars) was 1.5 per cent in the G7 (blue columns), compared with 4.5 per cent in the BRICS (red). China and India stood out, with extraordinarily high average growth rates of 12.3 and 6.4 per cent respectively (Figure 1). The average annual growth rate of Brazil, Russia and South Africa was 1.3 per cent—a bit below the G7 average.
Figure 1: annual growth of real per capita GDP at purchasing-power parities (%)
There are, though, limitations to national-income statistics, which fail to capture non-market and hidden incomes—never mind the tendency of autocratic rulers to cook the books. Anyway, income is not everything and a broader perspective is called for, including political and social aspects.
Health and education
Let us begin with public health. Figure 2 shows that, except for the China-US comparison, average life expectancy at birth remains higher in each of the G7 countries than in the BRICS. The G7 has an average expectancy of 81 years, compared with 70 in the BRICS. This gap seems however likely to shrink further in the years ahead, as public-health outcomes converge.
Figure 2: life expectancy at birth, 2022
In education, the Programme for International Student Assessment of the Organisation for Economic Co-operation and Development periodically tests 15 year-olds in reading, mathematics and science. China towers over all the others (Figure 3) but Russia, like Italy, lags slightly behind the rest of the G7 while Brazil is further adrift and India and South Africa no longer participate in the PISA tests—having received low scores before.
Figure 3: PISA scores, 2018
Figures 2 and 3 explain why the Human Development Index, which reflects health and education alongside income, registers a much smaller gap between the two groups than the comparison of per capita incomes alone. On a scale from 0 to 1, the average HDI is 0.9 for the G7 and 0.7 for the BRICS.
Democracy and freedom
Figure 4 compares the state of democracy in the two groups as assessed by the Institute for Democracy at the University of Gothenburg, which applies several indicators in 180 countries to produce a composite index from 0 to 1. Unsurprisingly, Nordics—Denmark, Norway and Sweden—occupy the top three places on the 2022 list, with Finland in 10th, although Iceland is 29th, behind Estonia, Latvia and Lithuania; the US is in 23rd place. Again, none of the BRICS democracy scores come close to those of the G7. India´s has collapsed under Narendra Modi’s Hindutva nationalism, from 0.5 in 2016 to 0.3 in 2022. Russia and China scrape the bottom of the ranking. The average score for the G7 is 0.77, compared with 0.31 for the BRICS.
Figure 4: Liberal Democracy Index, 2022
Freedom House provides a similar assessment (Figure 5). On a scale from 0 to 100, its average score for the G7 is 92, compared with 49 for the BRICS.
Figure 5: Civil Liberties and Political Rights Index, 2022
This matters because democracy, freedom and respect for human rights are universal values, according to international covenants such as the United Nations Universal Declaration of Human Rights of 1948. Also empirical evidence indicates that democracy and economic growth tend to go together.
Corruption, inequality, rule of law
Figure 6 shows the corruption scores assigned by Transparency International (more transparency indicates less corruption). TI defines corruption as the abuse of entrusted power for private gain. Again, each G7 country scores higher—so is perceived to be less corrupt—than all the BRICS. Other sources, such as Gallup, have reported the same conclusion. Majorities in 108 of 129 countries surveyed in 2012 said corruption was widespread in their government. Specifically, 61 per cent of G7 respondents considered corruption widespread, compared with 76 per cent in the BRICS (not including China).
Figure 6: Corruption Perceptions Index, 2022
Figure 7 shows the concentration of wealth by the share of the richest 1 per cent. According to the 2022 World Inequality Report, the average is 26 per cent in the G7 and fully 43 per cent in the BRICS. Moreover, wealth and income inequalities tend to go hand in hand: the Gini index (0 to 100) of income inequality is higher on average in the BRICS (39) than in the G7 (33.5).
Figure 7: share of wealth held by top percentile (%)
The World Justice Project compiles a Rule of Law Index (0 to 1) using 44 indicators across eight categories: constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice and criminal justice. It covers 140 countries, not including China and Russia. The average score for the G7 is 0.76, compared with 0.5 for the three other BRICS (Figure 8).
Figure 8: Rule of Law Index, 2022
In sum, G7 governments not only provide their citizens with higher per capita incomes but also longer lives, better education, more democracy and freedom, less corruption, more equality and more robust rule of law.
Exports and climate protection
Successful export of a broad array of manufactures demonstrates a country´s ability to produce goods other countries want to buy. Figure 9 shows that, despite China and India—both major producers of manufactured goods—exports of manufactures constitute a smaller share of total exports in the BRICS (48 per cent on average) than in the G7 (66 per cent).
Figure 9: share of manufactures in exports (%), 2022
Figure 10 describes the diversification of exports by commodity. It shows the Finger-Kreinin Index, a relative index from 0 (full diversification) to 1 (no diversification), which compares the structure of exports across countries by showing the extent to which it differs from the world average. Exports from G7 countries, with an average index of 0.33, are more diversified than those from the BRICS (0.53). Economic diversification from excessive dependence on the export of natural resources can be intrinsically advantageous, in the same way as political diversification from the dominance of entrenched elites can be beneficial in terms of democracy.
Figure 10: Finger-Kreinin index of export diversification, 2022
If selling several different products to the same customer spreads risk, so does selling the same product to several different customers. Figure 11 describes the economic-cum-geographic diversification of exports by trading partner. The International Monetary Fund’s export-diversification index runs from 0 (full diversification) to 10 (no diversification). With an average of 1.87, the G7 countries have more diversified exports, including more diverse trading partners, than the BRICS, whose average is 2.63. (The most recent values available refer to 2014.)
Figure 11: Theil index of export diversification, 2014
Finally, Figure 12 compares climate-change mitigation across the two groups, based on the Climate Change Performance Index compiled by the non-governmental organisation Germanwatch. The index ranges from 0 (poor performance) to 100 (good performance) and covers 59 countries as well as the European Union, using four groups of indicators: greenhouse-gas emissions (positively weighted), renewable energy, energy use and climate policy. The scores for the G7 and the BRICS are the same on average, at 45, but with considerable individual variation. India has the highest score of the 12 countries shown, surpassed only globally by Denmark, Sweden, Chile and Morocco; China and the US are about equally below average.
Figure 12: Climate Change Performance Index, 2022
Bipolar to multipolar
During the cold war, when national income statistics indicated—wrongly as it turned out—that the US and the Soviet Union were about to become roughly equal in economic terms, the world could be described as bipolar. The two hegemons were clearly not equal in political terms, however, one being a democracy and the other a dictatorship.
Since the Soviet collapse of 1991, the world has been widely seen as unipolar. China, India, Russia and others understandably reject this, in favour of a multipolar world view.
China and India have made impressive progress in many ways, especially in terms of longer lives under better conditions than before. But they still have some distance to go—especially China, which has never embraced democracy. Russia, whose per capita GNI was 40 per cent below the G7 average in 2022, is now adrift on numerous indicators.
Firm commitment
In the years ahead, the G7 and the BRICS will likely engage in brisk competition to win hearts and minds around the globe. The G7 are however the more cohesive group (even before the BRICS adds the six recent invitees)—and not just because the average distance between their capitals is 5,504 kilometres, compared with 9,291km for the BRICS.
More importantly, the G7 countries enjoy close relations among themselves, whereas China and India are old adversaries with unsettled territorial conflicts on their border. Furthermore, mindful of Russia´s long history of relentless expansion, eastwards as well as south and west, Chinese officials have seen reason to remind the Russians that Vladivostok was a Chinese city as recently as 1860.
With no similar issues on its hands, the G7 would like to be able to convince the BRICS of the benefits of embracing democracy and freedom. For that to be possible, however, they must not stray from firm commitment to democracy, freedom and respect for human rights themselves.
Thorvaldur Gylfason is professor emeritus of economics at the University of Iceland and a former member of Iceland´s Constitutional Council.
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