BRIC (Brazil, Russia, India and China) and the global economy
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BRIC is an acronym that refers to the countries Brazil, Russia, India and China. According to a paper published by Goldman Sachs in 2005, these countries have been growing rapidly, and will continue growing rapidly for the next fifty years. By the year 2050, the combined economies of the BRIC would be more than the combined economies of the current richest countries of the world: US, Japan and the European Union as per this report.
These nations have the prospects for the highest economic growth in the twenty-first century. According to the forecasts of economists, these nations have a growth rate that is twice as high as the rest of the world. Brazil will share its agricultural products; Russia, its raw materials; India, energy; and China, its manufactured goods and services, among themselves, in order to contribute to the growth of their respective economies.
The rise of these nations has mainly been due to globalization and free trade. First the GATT, and then the WTO, have had the same objective: to eliminate all barriers to free trade. This has been beneficial to the BRICs. Economists forecast that about 20 million Chinese will buy their first car in 2015. India, in the meanwhile, is gearing up to become one of the leading economies of the world. These nations are proceeding quickly towards becoming 'superpowers'.
Though the acronym 'BRIC' refers to the four countries, these nations have shown no inclination to be united, like the nations under the European Union. So, this leads us to the question: Why have these nations, which are diverse in most aspects, been grouped under the same concept? In this document, we will start with the economic and demographic analysis of these four nations.
We will then show the origin of the rise of power, up to the point where these nations have become important in the global economy. We will also show the existence of a symbiotic relationship between these nations and the industrialized countries. Finally, we will talk about the future of these four emerging countries and also the problems that they are likely to encounter.
Brazil exports many manufactured goods and its imports are mainly capital and intermediate goods. Its exports have risen sharply over the past three years, they are in part to the European Union (23%) and to the United States (19%). Brazil leads a balanced policy of openness vis-à-vis its partners in order to raise its exports (+ 20% in 2003).
India trades mostly with the United States, the United Kingdom, China, Germany and Japan. Indian exports are also increasing (25% in 2001-2002, 19% in 2002-2003 and 15% in 2003-2004) and the flow of foreign direct investment.
Countries trading with China are the United States, Argentina, Japan, the Netherlands and Germany.
China is emerging as the country's most active commercially BRIC. According to the Chinese Ministry of Commerce, she is not seeking trade surplus, as decided by the following factors: the transfer of international industries, rapid growth of industrialization and relative lack of consumer needs.
Rising oil prices led to a rapid growth of Russian exports. The country exports mainly raw materials, particularly oil, gas and metals (80%). It also appears that the products from fishing in Russia provide a quarter of global markets.
Tags: BRIC; Brazil, Russia; India; China; global economy