BRIC Countries case analysis MBA-575 The BRIC countries are Brazil, Russia, India, and China. The BRIC acronym was concocted in 2001 by Jim O’Neil of Goldman Sachs and ever since his paper was published the acronym has stuck and spread worldwide. These four countries are grouped together under the term BRIC because they are all in comparable phases of newly innovative economic growth, but are not yet considered a developed country. These four countries are thought to have the four most leading economies in years to come due to their vastly growing economies.
All four countries have increased their political cooperation one way or the other, possibly to influence the United States. If you compare these four countries statistics, there are many categories where they rank in the top percentile in numerous areas. The BRIC countries gross income was over 10 billion dollars in 2010, 25% of the gross national income countries. All four countries are rapidly growing population wise along with their gross national income. They are planned by 2050 to more than double their current statuses if they continue on the same paths are they are now.
This expected growth is important for more than Just those countries themselves, but their continued growth and path to becoming developed countries is vital to the rest of the world economy and power. These four countries growth and development over the last years has set a name for themselves with the promise to continue to grow into emerging countries with flourishing markets and strong economic potential. Important aspects to look at for each BRIC country is their age structure and fertility, population growth, gross national income, labor force and poverty, and potential.
According to Global Sherpa, “A countrys population and demographics, among other factors, directly affect the potential size of its economy and its capacity to function as an engine of global economic growth and development” . All of these factors and the rate of growth currently happening means that these four countries could potentially over the next forty years sustain almost fifty percent of the world gross national income. The four BRIC countries have sought out to each other for teamwork in trade, investments, development, and other key areas that will allow them to continue to grow and evelop.
When looking at Brazil, their population in 2011 was 197 million people and their gross national income was 1. 8 billion dollars. Brazil is the largest country in both South America and Latin America and is the fifth largest country in the world. Brazil was named one of the four BRIC countries because they have the world’s seventh largest economy and has one of the world’s fastest growing economies due to their economic reforms allowing them to have more international power. Brazil was also a founding country of the United Nations. Currently Brazil is a mixed conomy and a country that has many plentiful natural resources.
This is a boost to more demanded product. They also export many textiles, automobile parts, steel, coffee, beans, and ethanol. They are considered a valued country in their exports. Brazil has been able to grow their international presence financially which is a reason why Brazil was named one of the four BRIC countries. Brazil does have a larger per capita GDP than China and India and is known has a more established economy. Brazil is the one country that many are skeptical about if it truly deserves o be grouped with the other BRIC countries.
Is Brazil respectfully strong and powerful enough to be a member of the BRIC countries? Many “investors compare the projected rate of growth in Brazil this year Just 3% to that in China and India, around 8% and 6% respectively’ according to Anthony Pereira professor at a Brazilian Institute.. Brazil’s inflation also is over 6. 5% per year along with their payments deficit rising. Brazil has a large international reserve and continues to grow being the largest producer of soy and beef. Their tropical climate allows them to adapt to the rops that are desired and needed allowing them to always be a top exporter.
Another factor that helps Brazil is the fact that they have had a reduced economic inequality over the past few years. “If one looks past the superficial concern about growth at Brazil’s economic fundamentals, its resources, and the extraordinary social progress that the country has made in recent decades, it seems premature to remove the “B” from BRIC” . Even though the skeptics state that Brazil might not deserve the B in BRIC countries, I think that they have many reasons to remain in the category ith the other countries.
A downfall of Brazil’s dominance is that they currently do not have any nuclear weapons in their possession. Brazil and Russia are the two countries that are similar in size and have a similar GDP per capita. Both their economies depend highly on the natural resources that both nations produce. Russia’s population totals. Unlike Brazil, Russia’s averaging 7% annually in their per capita average. Their unemployment has been constantly dropping with the availability of more Jobs constantly coming with the large demand of their export products. In 1998, their poverty rate is down forty percent since 1998, which is a drastic change.
This is also an important factor in their middle class sizes growth from eight million people to 55 million people in Just six years. Moscow is Russia’s largest producing city of their GDP and houses most of their population. The Russian economy ranks 8th in the GDP and 6th in the purchasing power parity. Russia’s top products are mineral and energy resources, ranking them highest around the globe. These reserves have also allowed them to be a top producer of oil. Russia is a high ower nation and is known for having massive amounts of nuclear weapons in their possession.
Russia is considered the sixth largest nation from purchasing power parity and is ranked having the eighth biggest, recognized economy around the world. Their largest exports include timber, natural gases, oil, and metals. With the size of Russia, this among other influences is what directly affects their economy and their ability to continue to flourish and grow into an economic goldmine. “As early as 2003, Goldman Sachs forecasted that China and India would become the first and hird largest economies by 2050, with Brazil and Russia capturing the fifth and sixth spots” .
But based off of current economic growth, Russia might come in ahead of some not originally forecasted. India is the seventh largest country based off of size living there. their economy has grown over the years and is currently thel lth largest economy according to their nominal GDP. India is also the 3rd largest economy according to purchasing power parity. Much of their growth occurred after 1991, when they had an economic reform. Their cities became newly industrialized and heir economy started booming.
They still have the challenges of poverty and terrorism, but they have seen positive changes over the years in many areas of struggle. India is another of the BRIC countries that has a large supply of nuclear weapons, making them the third largest nuclear weapons country. India’s largest city is Mumbai which houses many of their workers. India’s workforce is of a massive size which empowers them to continue to produce and manufacture many exported goods. They are large suppliers of rice, textiles, cotton, sugarcane, petroleum, oftware, and other mining products.
Petroleum is one of their largest exports, ranking them as the 9th largest exporting country. “The BRIC thesis posits that China and India will become the world’s dominant suppliers of manufactured goods and services, respectively, while Brazil and Russia will become similarly dominant as suppliers of raw materials. “. India has proven that this is highly possible with their continued growth in exports. The size of their workforce really allows them to be a force in manufacturing, but many of their population continues to live in poverty.