THE BRIC

The BRIC

The BRIC

Introduction

The BRIC grouping—Brazil, Russia, India and China has become symbolic figure for the rise of emerging markets in the global economy. Goldman Sachs, the financial group, invented the group to highlight the potential of world's superpowers. The group is now celebrating 10th anniversary and have emerged stronger as projected by Goldman Sachs. Whereas, the world's largest economy, the US, was hit hard by the financial crisis and is still struggling with high unemployment rate, over-levered consumers and high dependency on capital.

The BRIC economies are emerging stronger than ever driven by their favorable demographics, rising incomes, productivity gains and rapidly growing domestic demand. Today, the BRIC economies have become the locomotives of the global GDP's growth and are turning into new world centers of political and economic influence. The BRIC countries are also in the process of strengthening their influence to push back the traditional leaders, the US and the EU. In fact, the world's major economies like the US, the EU, Japan, Canada and Australia are slowly but steadily losing their positions (Stefano, 2007).

Comparison of Economic Growth in BRIC

Brazil, located in the continent of South America, is listed by the IMF as the 10th largest economy in the world in 2008. Its total population reached 191 million with a literacy rate 90.0 percent for adults and 97.8 percent for youth in 2007. As a country with abundant natural resources like oil, iron ore, tropical rain forest, Brazil has been dependent upon exportation of raw material products for its economic growth. Brazil was one of the fastest growing economies in the world by the mid-1970s. Its GDP per capita reached US$ 1,140 in 1974 and US$ 8,949 in 2007; however, its economy grows much lower than other three BRIC countries in the last few decades. Specifically, its growth rate is even below the world average level between 1991 and 2006. Fortunately, Brazil's economy could recover from the worldwide financial crisis better than Russia, as the IMF predicts that both Brazil and Russia could contract 1.3 percent and 6.5 percent in 2009 but grow 2.5 percent and 1.5 percent in 2010 respectively. Although its GDP per capita ranks the second (only lower than Russia) among the BRIC countries, its economic performance appears the worst in the 4 economies.

As one of the two super powers in the “Cold War” era, Russia still maintains as an influential country, ranking the eighth largest economy in the world in 2008. It is the largest county in the world, covering more than one-ninth of the world's land area. Russia owns tremendous natural resources. For example, it has the greatest mineral resource reserves, the largest natural gas reserves, the second largest coal reserves, the eighth largest oil reserves, and the largest fresh water reserve on the earth. Despite the fact that Russia has one of the largest populations in the world (142 million in 2007), its population faces a negative annual growth, which would affect its long-run economic ...