Increasing trade amongst BRICS Nations Using Ease of Doing Business

as Tool Ketan Vira , Associate Professor- GNVS Institute of Management, Mumbai .Poonam Merwani, Assistant Professor- Vidyalankar School of Information Technology, Mumbai

Doing Business

Doing Business provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations applying to small and medium-size through their life cycle.

Doing Business

Doing Business presents results for 2 aggregate measures: the distance to frontier score and the ease of doing business ranking. The ranking of economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier.

Introduction

General Agreement on Tariffs and Trade

World Trade Organization

Between 1950 and 2007, for example, real world trade grew by 6.2% a year while real income per capita grew by 2% a year. Greater international trade is strongly correlated with economic growth.

Introduction: BRICS

BRICS brings together five major emerging economies, comprising

43% of the world population, having 30% of the world GDP and 17% share in the world trade.The acronym BRIC was first used in 2001 by Goldman Sachs in their Global Economics Paper, "The World Needs Better Economic BRICs" on the basis of econometric analyses projecting that the economies of Brazil, Russia, India and China would individually and collectively occupy far greater economic space and would be amongst the world’s largest economies in the next 50 years or so.

Literature ReviewWorld Bank Flagship Report on India (2017) examines economy profile of India in terms of indicators which are useful for comparison with the selected economies (comparator economies) for each indicator.

World Bank Flagship Report (2017) on Brazil, Russia, China and South Africa has also been referred to understand the areas under the study.

Baumann/Ng (2012), provides an appraisal of trade flows between Brazil and the other BRICS from a different perspective than has been adopted by other studies so far. Emphasis was given to the roles of the indicators of comparative advantage, as well as to the role of different tariff barriers imposed on Brazilian products and on Brazil`s potential competitors in the neighborhood of each BRIC.

Objectives of the Study

• To compare and analyze the position of BRICS economies on the indicator of trading across the borders

• To study the areas where Intra- BRICS trade can improve

• To suggest the measures in the selected parameter to improve India’s ranking on selected indicator

Analysis To compare and analyze the position of BRICS economies on the indicator of trading across the borders Country DB 2016

Overall Rank

DB 2017 Overall Rank

DB 2016 Trading Across Borders Rank

DB 2017 Trading Across Borders Rank

DTF 2016 Score on Trading Across Borders Rank

DTF 2017 Score on Trading Across Borders Rank

Observation on Trading Across Borders Rank and DTF

Brazil 121 123 150 149 54.20 55.57 Rank: +1 DTF:+1.37

Russian Federation

36 40 138 140 57.96 57.9 Rank: -2 DTF: 0

India 131 130 144 143 56.45 57.61 Rank: +1 DTF: + 1.16

China 80 78 94 96 69.13 69.13 Rank:+2 DTF: 0

South Africa

72 74 137 139 58.01 58.01 Rank: -2 DTF: 0

Source: Prepared

AnalysisTo study the areas where Intra-BRICS trade can improve

Source: Prepared

Country Exports ImportsCountry % of

total trade

Rank Country % of total trade

Rank

Brazil China 18.6% 1 China 17.9% 1Russia China 8.2% 2 China 19.3% 1India China 3.6% 5 China 15.8% 1China None - - China

(re-import)

8.6% 4

South Africa

China

India

8.3%

-

1

-

China

India

18.3%

5%

1

5

AnalysisTo suggest the measures in the selected parameter to improve

India’s ranking on selected indicator

Factors Measures

Time Can be reduced by reducing Documentary and Border Compliances

Cost Can be reduced by reducing Documentary and Border Compliances

Documentary Compliances

Can be reduced by using electronic single window, which India to major extent as introduced through reforms

Border Compliance

Effective Inspection System

Domestic Transport

Improving Infrastructure

Source: Prepared

ConclusionLooking at the present scenario of reverse globalization and increasing protectionism increasing trade amongst BRICS nations can help to improve their role in the global economy. Further this will help the BRICS nation to increase their distance to frontier. However, study tries to conclude that Brazil, Russia, India, China and South Africa can use the best practices as followed by the countries that lead on the indicator of trading across the borders and can use it to their advantage. Further, BRICS success depends on many other criteria as all the BRICS nations are not in proximity. BRICS nations can evaluate its indicator on each of the parameter as mentioned in Ease of Doing Business and can use it as the tool to enhance the trade amongst the member nations.

References http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual-

Reports/English/DB17-Full-Report.pdf

http://www.doingbusiness.org/data/exploreeconomies/india

http://www.doingbusiness.org/data/exploreeconomies/brazil

http://www.doingbusiness.org/data/exploreeconomies/russia

http://www.doingbusiness.org/data/exploreeconomies/china

http://www.doingbusiness.org/data/exploreeconomies/southafrica

http://www.doingbusiness.org/data/distance-to-frontier

https://www.tralac.org/Reports/Intra-BRICS/2016.pdf

R. Baumann, F.Ng (2012). Trade among BRICS: Still a Bumping Road from a

Brazilian perspective. p.p 1-26

Thank You