1. BRIC An Economic Miracle Vartika Sahu Amrit Varsha
2. BRIC Nations 45% world population 28% global GDP Brazil
china India Russia South Africa
3. An Introduction The term was coined by Jim O Neil of Goldman
Sachs in 2001 in his paper titled The World Needs Better Economic
BRICs. BRICS is the acronym for an association of five major
emerging national economies: Brazil, Russia, India, China and South
Africa. The grouping was originally known as "BRIC" before the
inclusion of South Africa in 2010.
4. Is God Brazilian? Brazil is the top exporter of every
commodity that has seen dizzying price surges- iron ore, soybeans,
sugar Brazilian stocks and bonds climbed heavenward, $5 billion in
early 2007 to $50 billion in 2011 According to Brazilian president
it is Brazils momento magico
5. Momento magico over?? Brazil will "remain a drag on the rest
of the world for the next few years. "The economy remains reliant
on consumption, mainly fuelled by credit, both of which are showing
signs of exhaustion. Industry remains stagnant Unemployment has
crept up from historical lows. The hefty investments needed to
overhaul Brazil's ramshackle infrastructure aren't coming
through
6. Russia:Theres Room Only at the Top Oil and Gas account for
50% of Russian Exports and 30% of the federal revenue Oil Profits
are saved on a rainy day account called the stabilization fund. In
2007 the fund held more than $225 billion Since the late 1990s the
average Russian income has risen from $1,500 to $13,000, more than
twice as Chinas
7. Has Russia lost the thread? Growth in Russia has fallen for
six consecutive quarters. Stage 5 declining population. In other
words, Russia may be feeling the effects of a region wide
slowdown.
8. The Trajectory of Chinese growth The emerging market mania
began with China In 1998 China began an unbroken run of growth at
8% or more each year till date Over the past decade Chinas exports
have grown at an average yearly pace of 20%
9. The fountain of youth is going to dry!! Back in 2008 Premier
Wen Jiabao described Chinese growth as unbalanced, uncoordinated
and unsustainable!! Total debt as a share of GDP is rising fast
Advantage of cheap labor, a key to Chinese boom is quickly
disappearing The declining workforce is leading China towards a
wage driven inflation
10. From BRIC to BRICS!! In the Investment Outlook Summit the
prospects of South African success was dismissed Jim O'Neil told
the summit that South Africa, at a population of under 50 million
people, was just too small an economy to join the BRIC ranks. The
BRIC countries formed a political organization among themselves,
and expanded to include South Africa
11. India on a Tiger Road!! Indias GDP has grown from 5.83% to
9.7 % from 2000 to 2010 (at constant market prices) India is the
highest exporter of textile, gems and jewellery India is witnessing
its period of large labor boom
12. The Great Indian Hope Trick!! India, Bloomberg noted ,
faces "a crisis of credibility." The process of economic reform
that began in the 1990s, it said, "has ground to a halt."
Corruption, red tape and subsidies are only one part of the
problem. India faces serious : As Mark Mobius of the investment
firm Franklin Templeton told : "The surprising thing is the
government doesn't seem to be acting with any degree of
urgency."
13. The Global Indian Statistics Criteria Worldwide Ranking
Population 2 Human Development Index 136 Public debt 29 GDP per
capita 126 Imports 10 Exports 20 Labor force 2
14. Country Population GDP (nominal) Government spending
Exports Imports GDP per capita (PPP) Literacy rate Life expecta ncy
(years, avg.) HDI Brazil 193,946,886 $2,395.9 bn $846.6 bn $256.0
bn $238.8 bn $11,875 88.6% 78 .730 (high) Russia 143,451,702
$2,021.9 bn $414.0 bn $542.5 bn $358.1 bn $17,708 99.6% 67.7 .788
(high) India 1,210,193,422 $1,824.8 bn $281.0 bn $309.1 bn $500.3
bn $3,829 74.04% 64.2 .554 (medium ) China 1,354,040,000 $8,227.0
bn $2,031.0 bn $2,021.0 bn $1,780.0 bn $9,161 92.2% 72.7 .699
(medium ) South Africa 51,770,560 $384.3 bn $95.27 bn $101.2 bn
$106.8 bn $11,375 86.4% 51.2 .629 (medium )
15. Projected GDP growth (in billion $)
16. Projected growth in the GDP of G7 and BRIC (in bill $)
Groups 2050 2045 2040 2035 2030 2025 2020 2015 2010 BRIC 128,32 4
98,757 74,483 55,090 40,278 28,925 20,226 13,653 8,640 G7 66,039
59,475 53,617 48,281 43,745 39,858 36,781 33,414 30,437
17. BRICS and G7 GDP comparisons (in US bill $) 0 20,000 40,000
60,000 80,000 100,000 120,000 140,000 YE 2010 YE 2015 YE 2020 YE
2025 YE 2030 YE 2035 YE 2040 YE 2045 YE 2050 BRIC G7
18. Factors Behind The Growth Of BRIC Demographic dividend.
Rise of the middle class. Science and technology in the BRICs Next
emerging 11 markets. Growth environment score
19. The demographic outlook for the BRICs varies greatly. The
differences in the projected change in the working-age population
are very significant in both absolute and relative terms. This will
impact not only economic growth prospects, but also savings and
investment behaviour and potentially financial market growth
prospects. Brazil and India are demographically in a substantially
more favourable position than China and Russia. With the exception
of India, demographic developments in the BRICs are becoming, or
will soon become, a net negative in terms of per-capita growth.
DEMOGRAPHIC DIVEDEND
20. DEMOGRAPHIC DIVEDEND
21. The rise of the middle class Rapid economic growth of china
and India will lead to a large middle class Consumption of the
middle class would help drive the BRICs economic development and
expansion of the global economy.
22. Science and technology Since 2002, global spending on
science R&D has increased by 45 percent to more than $1,000
billion (one trillion) U.S. dollars. From 2002 to 2007, China,
India and Brazil more than doubled their spending on science
research, raising their collective share of global R&D spending
from 17 to 24 percent.
23. Research and development Chinas development planning has
targeted a number of scientific fields and related industries,
including clean energy, green transportation and rare earths, among
others. Since 1999, Chinas spending on science R&D has grown 20
percent annually to more than $100 billion. By 2020, China plans to
invest 2.5 percent of GDP in science research.
24. Next 11 Emerging Markets Goldman Sachs identified another
group of economically dynamic and promising developing countries
creatively labelled the Next 11 in its 2005 Economics Paper No. 134
How Solid are the BRICs? The Next 11 consists of a broader group of
emerging markets with the potential to play significant roles in
the global economy, including: Bangladesh, Egypt, Indonesia, Iran,
Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and
Vietnam.
25. Growth Environment Score The Growth Environment Score (GES)
was introduced by Goldman Sachs in the same paper that identified
the Next 11. The GES is an index developed to measure the extent to
which structural conditions and policy settings in a country are
conducive to transforming the economic potential of the BRICs, Next
11 and other countries into reality.
26. categories of economic growth determinants: Macroeconomic
stability inflation, government deficit and external debt
Macroeconomic conditions investment and openness Technological
capabilities penetration of phones, PCs and internet Human capital
average years of secondary education and life expectancy Political
conditions political stability, rule of law and corruption
27. GES SCORE bric CHINA -53 RUSSIA-81 BRAZIL-95 INDIA- 97 N-11
COUNTRIES SOUTH KOREA- 17 MEXICO -59 VIETNAM-63 South Africa -80
Iran -86 Egypt -91 Turkey -112 Indonesia -114 Pakistan -126
Bangladesh -134 Nigeria -147
28. Proposals The officials of BRICS nations have agreed to set
up a bank with a bank capital of $50 billion which is equally
shared between all the member countries Indonesia and Turkey have
been mentioned as candidates for full membership Egypt and Nigeria
have expressed interest in joining.
29. Criticisms The coverage by the mainstream media in the
BRICS summit seems to have regarded the BRICs Summit as more of a
failure than a success. BRICS nations have not unified on the world
stage Brazil frequently raises the issue of China's monetary
policy, meanwhile India and China have a history of fraught
relations over Tibet. There also rising concerns in South Africa
that the relationship with China is too unbalanced.
30. Conclusions While we come across criticisms against BRICS
nations we tend to forget that the concept is only 5 years old When
we talk about differences among different member countries overlook
the fact that all these countries are
economically,socially,politically and culturally so different.
