Effects of Geoeconomic Fragmentation: BRICS vs G7

Valentin P. Vishnevsky 1, Sergey A. Makovetsky 1, Elena N. Vishnevskaya 2

1 Institute of Economic Research, Donetsk, Russia
2 Donetsk National Technical University, Donetsk, Russia

Abstract

The article analyzes the effects arising from geoeconomic fragmentation – politically conditioned contradictory processes in international economic relations, which, on the one hand, reduce openness in relations with unfriendly countries, hindering system-wide international cooperation, and, on the other hand, encourage “macroregional globalization” – strengthening economic ties with friendly countries, stimulating inclusive (for the alliance member countries) economic growth. It is proven that the main qualitative features of international economic relations in the context of geoeconomic fragmentation are the refusal of the leading world players to unconditionally support globalization, an increase in the use of force or the threat of force to resolve geo-economic issues, division of the world economy and trade relations along geopolitical lines. To quantitatively assess the processes of geo-economic fragmentation, a coefficient of foreign trade autonomy of the alliance member countries is proposed, which characterizes the ratio of its domestic and foreign trade volumes. The following hypotheses are put forward: (1) there is an optimal value of the foreign trade autonomy coefficient, at which the highest rates of growth in the output of the alliance member countries are achieved; (2) it is advisable for the BRICS countries to increase this coefficient (deepen mutually beneficial cooperation), since the peak of the maximum rates of growth in output has not yet been passed. It is also substantiated that the statement about the unconditional harm of geo-economic fragmentation, especially for less developed economies, is not entirely correct. It is necessary to look at what kind of economies these are and take into account additional factors: reducing the risks of excessive dependence on unfriendly countries in the supply of essential goods and resources; strengthening national economic sovereignty by removing some supranational restrictions; opening up greater opportunities for pursuing independent trade and industrial policies; ensuring sustainability in sectors that are critical to national security; opportunities for better control over migration; facilitating the processes of socio-cultural adaptation of migrants; diversification of trade partners; encouraging countries to seek alternative trade agreements and partnerships within the framework of creating and/or strengthening friendly blocs.

Keywords

international economic relations; globalization; geoeconomic fragmentation; economic sovereignty; risks of foreign trade relations

JEL classification

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About Authors

Valentin Pavlovich Vishnevsky

Doctor of Economic Sciences, Professor, Chief Researcher, Institute of Economic Research, Donetsk, Russia (283048, Donetsk, Universitetskaya street, 77); ORCID https://orcid.org/0000-0002-8539-0444 e-mail: vvishn@mail.ru

Sergey Alexandrovich Makovetsky

Candidate of Economic Sciences, Associate Professor, Scientific Secretary, Institute of Economic Research, Donetsk, Russia (283048, Donetsk, Universitetskaya street, 77); ORCID https://orcid.org/0000-0002-1722-8517 e-mail: ups.dn@mail.ru

Elena Nikolaevna Vishnevskaya

Candidate of Economic Sciences, Associate Professor, Head of the Department of Economic Theory and Public Administration, Donetsk National Technical University, Donetsk, Russia (283001, Donetsk, Artema street, 58); ORCID https://orcid.org/0000-0002-1510-2371 e-mail: vishn.elena@mail.ru

For citation

Vishnevsky, V.P., Makovetsky, S.A., Vishnevskaya, E.N. (2025). Effects of Geoeconomic Fragmentation: BRICS vs G7. Journal of Applied Economic Research, Vol. 24, No. 1, 6-33. https://doi.org/10.15826/vestnik.2025.24.1.001

Article info

Received December 20, 2024; Revised January 12, 2025; Accepted January 17, 2025.

DOI: https://doi.org/10.15826/vestnik.2025.24.1.001

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