Came into existence in the year 2001 as BRIC NATIONS.
The term BRIC was coined by Chief Economist of investment firm Goldman Sachs.
The countries of Brazil, Russia, India and China are four of the biggest emerging economies today. Way back in 2001, Goldman Sachs had predicted that by the year 2050, these four countries would become bigger than the six most-industrialised nations in dollar terms. Now, things have changed to such an extent, that the prediction has been moved closer to year 2025.
Developing
countries are being thought of as engines of the world economy. The World Bank has said that since 2008, the developing world have contributed almost all of what economic growth there has been. The countries of Brazil, Russia, India and China lead the way in terms of their contribution to global growth rate, leading to a situation where the emerging economies depend lesser on the developed world than ever before.
Trade happens globally, and the share of the BRIC nations in this world trade has increased substantially over the years. In 2001, the BRICs accounted for just 7% of world trade, but by 2008, their share had increased to almost 13%.
China and India, being close neighbours, are trading more than ever before. Also, all the BRICs have taken the global economic crisis, as a means to make better their relationships with the poorer developing world. For instance, all the four BRICs have significantly increased their contributions, financially, to the African continent. According to research done by the Overseas Development Institute (O DI), the BRICs have invested huge amounts, in the form of foreign direct investment (F DI), as well as loans, to countries in Africa.
India has provided loans of more than $200 million to the African countries since 2009. China has invested almost $4000 million as foreign direct investment. Russia too has contributed more than $3000 million as FDI. Brazil has invested around $4000 million in Africa.
Brazil, Russia, India and China, are today bigger than ever before. Their GDP has grown, their reserves of Foreign Direct Investment (F DI) has become bigger, as has their financial contributions to the rest of the world. The BRICs together play an essential role in the G20. Besides the G20, three of the four BRICs are important members of the World Trade Organisation.
Through their membership in the WTO, they can ensure that the needs and demands of the developing world are met on an equal par with those of the developed and industrialised world.
The global financial meltdown of 2008 has not left the economies of Brazil, Russia, India and China, known as the BRIC club injured. As the developed world faces recession, BRIC growth is inevitably set to slow. Yet strong foreign exchange reserves and growing domestic demand has allowed BRIC to withstand the crisis and continue growing, strengthening their position as a major consumer market.
The financial meltdown of October 2008 sent stock markets in BRIC economies tumbling as foreign investors fled. The notion that emerging economies were disconnected from the crisis in the developed world has proved wrong. As the global economy was set to slow in 2009, BRIC economies felt the consequences. China and Brazil witnessed weaker demand from the USA and Europe for their exports, while India's services sector, oriented towards developed economies, suffered. Russia was the most vulnerable of the BRIC countries as it is heavily reliant on the hydrocarbon sector, which was hit by falling energy prices.
However,
unlike other emerging economies, BRIC had large trade surpluses and foreign exchange reserves that made them more resilient to the crisis. Governments were set to use the reserves to increase spending and boost consumer demand. Growing consumer spending in BRIC countries helped them to withstand the crisis. While the pace of growth was excepted to slow, BRIC remained a huge and growing consumer market.
The crisis was expected to remove the danger of inflation making life easier for BRIC consumers and allowing governments to ease interest rates, fuelling further growth.
After a decade of growth, BRIC economies have built up strong consumer demand, which could take the lead as the prime engine for growth. In 2007, consumer expenditure as a share of G DP amounted to 35.0% in China, 48.0% in Russia, 54.1% in India and 61.0% in Brazil. All BRIC countries have accumulated high levels of foreign exchange reserves, measuring in 2007 US$1,528 billion in China, US$464 billion in Russia, US$266 billion in India and US$179 billion in Brazil. These foreign exchange reserves will allow governments to boost public spending in order to support the economy. This could take the form of social benefits to encourage consumers to spend more
The surplus could also be used for public investments in transport infrastructure upgrades, which are planned in all BRIC countries. These upgrades would improve the business environment and create jobs that could offset job losses from weaker exports.
The BRICs are becoming superpowers. Whether they would surpass the expectations, lying on them is something that we can only speculate on. But it is no doubt, that they have become more important today than before ² more rests on their growth rather than on the growth of the previously bigger powers of the world.
In recent years, new terms have emerged to describe the largest developing countries such as BRIC that stands for Brazil, Russia ,India, and China , along with BRICET (BRIC + Eastern Europe and Turkey). BRICS (BRIC + South Africa). BRICM (BRIC + Mexico) . BRICK (BRIC + South Korea). Next Eleven (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam) . CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa).These countries do not share any common agenda, but some experts believe that they are enjoying an increasing role in the world economy and on political platforms.
PRESENTED
BY:
ABHISHEK. RAJESH . VIPIN. SHAHID. THANK YOU !!!!
