ENG - In economics, BRIC or BRICs is an acronym that refers to the fast growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by the bank holding company Goldman Sachs in 2001. Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world.
Goldman Sachs did not argue that the BRICs would organize themselves into an economic bloc, or a formal trading association, like the European Union has done. However, there are strong indications that the "four BRIC countries have been seeking to form a "political club" or "alliance", and thereby converting "their growing economic power into greater geopolitical clout". One of the recent indications was from a BRIC Summit meeting in 2008, in the Russian city of Yekaterinburg between the foreign ministers of the BRIC countries. Also in his Latin America trip Russian President Dmitry Medvedev while visiting Brazil, met with Brazilian President Luiz Inácio Lula da Silva and agreed to visa-free travel. Have you voted for or against BRIC ? Medvedev has also recently made a trip to New Delhi, India to meet with Indian President, Prathiba Patil and Prime Minister Manmohan Singh to discuss a nuclear deal as well as agreeing to cooperate in the spheres of finance and financial security, tourism, culture and fighting drug trafficking.
The BRIC thesis
Goldman Sachs argues that the economic potential of Brazil, Russia, India, and China is such that they may become among the four most dominant economies by the year 2050. The thesis was proposed by Jim O'Neill, global economist at Goldman Sachs. These countries encompass over twenty-five percent of the world's land coverage, forty percent of the world's population and hold a combined GDP (PPP) of 15.435 trillion dollars. On almost every scale, they would be the largest entity on the global stage. These four countries are among the biggest and fastest growing Emerging Markets.
However, it is important to note that it is not the intent of Goldman Sachs to argue that these four countries are a political alliance (such as the European Union) or any formal trading association, like ASEAN. Has changed the detail your opinion on BRIC ? Nevertheless, they have taken steps to increase their political cooperation, mainly as a way of influencing the United States position on major trade accords, or, through the implicit threat of political cooperation, as a way of extracting political concessions from the United States, such as the proposed nuclear cooperation with India.
The BRIC numbers
The Economist publishes an annual table of social and economic national statistics in its Pocket World in Figures. Extrapolating the global rankings from their 2008 Edition for the BRIC countries and economies in relation to various categories provides an interesting touchstone in relation to the economic underpinnings of the BRIC thesis. It also illustrates how, despite their divergent economic bases, the economic indicators are remarkably similar in global rankings between the different economies. It also suggests that whilst economic arguments can be made for linking Mexico into the BRIC thesis, the case for including South Africa looks considerably weaker. A Goldman Sachs paper published later in December 2005 explained why Mexico wasn't included in the original BRICs. Have you read details about European Union ? According to the paper, among the other countries they looked at, only Mexico and perhaps Korea have the potential to rival the BRICs, but they are economies that they decided to exclude initially because they looked at them as already more developed. According to that paper, Mexico becomes the sixth-largest economy, ahead of Russia.
BRIMC and BRICK
Mexico and South Korea are currently the world's 13th and 14th largest economies in terms of nominal GDP, just behind the BRIC and G7 economies, and are both experiencing GDP growth of 5% every year, a figure comparable to Brazil from the original BRICs. Jim O'Neill, expert from the same bank and creator of the economic thesis, stated that in 2001 when the paper was created, it did not consider Mexico, but today it has been included because the country is experiencing the same factors that the other countries first included present. While South Korea was not originally included in the BRICs, recent solid economic growth led to Goldman Sachs proposing to add Mexico and South Korea to the BRICs, changing the acronym to BRIMCK, with Jim O'Neill pointing out that Korea "is better placed than most others to realize its potential due to its growth-supportive fundamentals.
A Goldman Sachs paper published later in December 2005 explained why Mexico and South Korea weren't included in the original BRICs. According to the paper, among the other countries they looked at, only Mexico and Korea have the potential to rival the BRICs, but they are economies that they decided to exclude initially because they looked at them as already more developed. Can BRIC have an influence on European Union ? However, due to the popularity of the Goldman Sachs thesis, "BRIMC", "BRICK" and "BRIMCK" are becoming more generic marketing terms to refer to these six countries.
In their paper "BRICs and Beyond", Goldman Sachs stated that "Mexico, the four BRIC countries and South Korea should not be really thought of as emerging markets in the classical sense", adding that they are a "critical part of the modern globalised economy" and "just as central to its functioning as the current G7".
The term is primarily used in the economic and financial spheres as well in academia. Its usage has grown specially in the investment sector, where it is used to refer to the bonds emitted by these emerging markets governments.
It is primarily the same as the BRICs, with Goldman Sachs argues that the economic potential of Brazil, Russia, India, Mexico and China is such that they may become among the five most dominant economies by the year 2050. The thesis was proposed by Jim O'Neill, global economist at Goldman Sachs. These countries are forecast to encompass over forty percent of the world's population and hold a combined GDP (PPP) of 14.951 trillion dollars. On almost every scale, they would be the largest entity on the global stage. Did you know that BRIC is popular at 48% of voters?? However, it is important to note that it is not the intent of Goldman Sachs to argue that these five countries are a political alliance (such as the European Union) or any formal trading association, like ASEAN. Nevertheless, they have taken steps to increase their political cooperation, mainly as a way of influencing the United States position on major trade accords, or, through the implicit threat of political cooperation, as a way of extracting political concessions from the United States, such as the proposed nuclear cooperation with India. Due to Mexico's rapidly advancing infrastructure, increasing middle class and rapidly declining poverty rates it is expected to have a higher GDP per capita than all but three European countries by 2050, this new found local wealth will also contribute to the nations economy by creating a large domestic consumer market which in turn creates more jobs. The main reason that Mexico was not initially included into the BRIC thesis was because it was already considered a major economy and a significant global contributor due mainly to its high oil output and manufacturing industries.
Despite being a developed country, South Korea has been growing at a speed comparable to Brazil and Mexico. More importantly, it has a significantly higher Growth Environment Score (GES) than all of the BRICs or N-11s, Goldman Sachs' way of measuring the long-term sustainability of growth. Experts such as William Pesek Jr. from Bloomberg argue that Korea is "Another `BRIC' in Global Wall", suggesting that it stands out from the Next Eleven economies. A reunited Korea is likely to happen before 2050, which would raise the country's population to over 75 million, larger than the UK and France from the G7. Cheap, skilled labor from the North combined with advanced technology and infrastructure in the South, as well as Korea's strategic location connecting three economic powers, is likely going to create an economy larger than the bulk of the G7. Nonetheless, without reunification, South Korea will overtake Canada by 2025 and Italy by 2035 according to their paper "The N-11: More Than an Acronym". Economists from other investment firms argue that Korea will have a GDP per capita of over $90,000 by 2050, virtually identical to the United States and the second highest among the G7, BRIC and N-11 economies, sugg. sting that wealth is more important than size for bond investors, stating that Korea's credit rating will be rated AAA sooner than 2050.
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