BRIC Countries - Explained
Brazil, Russia, India and China
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Table of ContentsWhat are the BRIC Countries?Why are the BRIC Countries Important?Introduction and Early Writing on BRIC
What are the BRIC Countries?
BRIC is used to define the idea that by 2050 Brazil and Russia will have become the worlds dominant suppliers of raw materials while China and India will have become dominant suppliers of manufactured goods in the world. BRIC nations, which have expanded to now include South Africa, have been cited by most companies to be a source of foreign expansion opportunity because of their low labor and production costs. Back in 1990, the percentage of GDP accounted for by BRIC countries was 11% but in 2014, this figure had exponentially risen to almost 30%. This value, however, plunged around the 2008 financial crisis.
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Why are the BRIC Countries Important?
Jim ONeil of Goldman Sachs 2001, presented the economies of BRIC countries to be the fastest growing. It is predicted that these economies will be wealthier than most of the current major ones by 2050. Goldman Sachs does not present these countries as a political alliance or a trading association, instead they are presented as having power as an economic bloc. Their leaders frequently attend summits together and act in tandem with ach others interests.
Introduction and Early Writing on BRIC
A report was written in 2001 by Jim ONeill which stated that the GDP of BRIC nations was slated to grow more quickly than that of the G7 while the global GDP was expected to grow by 1.7% that year. This report, titled Building Better Economic BRICs, presented four scenarios for measuring and projecting GDP that was adjusted for purchasing power parity. This scenarios showed the rise in nominal GDP assumption from the 2001 measurement in US Dollars of 8% to 14.2% which when converted to PPP rates, was from 23.3% to 27.0% Back in 2003 another report was written and published by Goldman Sachs which was titled Dreaming with BRICs: The Path to 2050. This report claimed that the cluster of BRIC could potentially outgrow the size of the G7 in terms of USD. This would thus lead to a change in the worlds largest economies in four decades since the current ones would no longer be the richest. A paper was published in 2007 that was called BRICs and Beyond and it majored on the growth potential, sustainability and the environmental impacts of the rising BRIC economies. The paper also put into consideration a Next-11 (eleven emerging economies) in relation to BRIC nations and also the overall ascendency of new global markets. The BRIC Thesis by ONeill has been challenged throughout the years since the economic and geopolitical climate has shifted. Arguments for this thesis include the belief that the raw materials in BRIC countries are unlimited while those criticizing it argue that they ignore the nature of fossil fuels, uranium and other heavily used resources which are finite. However, since China has higher GDP growth and political muscle, it outshines the other BRIC members and so its put in another category.