"BRIC" (Brazil, Russia, India, China) is a term that has been used for a few years to refer to this particular block of countries, but I don't think most people know exactly what it refers to. It is an informal term applied to these 4 rapidly developing nations. Collectively their economies are undergoing vast structural changes that for the most part are lifting their populations out of extreme poverty. It is a good thing that so many people are moving above subsistence existence and beyond. Is that not what we in the developed ("rich") world have wanted for 50+years?
The problem this creates in the short term is a tremendous increase in demand for all sorts of resources, primarily energy and food. As the poor gain more purchasing power they want better (and more) food of all types. They want to own a vehicle. They want to plug into the power grid as they gain access to the multitude of gadgets we seem to be able to not get along without.
Below is a brief description/profile of the BRIC countries. Go HERE for more in depth info.
Who are the BRICS?
The BRICS countries, five nations grouped together because of their burgeoning economies, are in the spotlight this week as their leaders meet in China. Made up of Brazil, Russia, India, China and, as of this week, South Africa, the BRICS countries are grouped together because while they are not yet economic powerhouses, they have the potential to become the world’s most dominant economies in the next few decades.
Brazil
Although not as talked about as India and China, there’s been no shortage of interest in Brazil’s $2.1 trillion economy. Although it exhibited slightly negative growth in 2009 (still far better than many other economies, whose negative growth was much greater), Brazil’s economy bounced back forcefully in 2010, showing 7.5 percent economic growth. It is the eighth-largest economy in the world, and economists project it will reach the No. 5 spot in the next few years. Years of growth have brought a majority of Brazilians into the middle class.
Brazil’s industrial and agricultural sectors drive much of that growth. Agriculture and agribusiness make up about 25 percent of the country’s gross domestic product and 36 percent of Brazilian exports, while the industrial sector – auto manufacturing, textiles, and machinery, to name a few – drives about a third of the country’s GDP. A privatization campaign and favorable trade policies have made Brazil a huge beneficiary of foreign investment.
Russia
Russia’s transition in the 1990s from a centrally planned economy to a free market was not smooth. Inadequate fiscal reforms and borrowing led to a financial crisis in 1998 that wiped out much of the foreign investment it gained. The situation was exacerbated by dropping prices for its major exports (oil and minerals) and spillover from the Asian financial crisis.
The country bounced back quickly, registering about 7 percent growth for the next several years – until the global financial crisis, which hit Russia hard once again and prompted a stock market collapse. In 2009, economic growth was a whopping negative 7.9 percent. Today, a rapid turnaround has brought growth back up to 3.8 percent in 2010.
Russia’s economy, the world’s tenth largest, is driven by oil and natural gas exports, as well as timber, furs, minerals, and metals.
India
The second most populous country in the world is another one of the world’s emerging economic powerhouses. India is the 12th-largest economy, with a gross domestic product of $1.21 trillion and a growth rate of 6.5 percent in 2009. However, this growth has not been evenly distributed – 700 million Indians live on $2 or less a day and the middle class, while growing, is still only 50 million of its 1.17 billion people. The middle class is expected to expand ten-fold by 2025.
India’s attempts at economic reforms – tariff reductions, financial modernization, and stronger intellectual property rights, to name a few – have been sporadic. Corruption is still a big problem, as are excessive bureaucracy, investment controls, and economic policies that undermine efforts at economic liberalization.
The services industry accounts for 54 percent of GDP, while industry makes up 29 percent and agriculture 18 percent. Outsourcing to India has become common practice in the US. The software sector in particular is booming, generating $35 billion in exports in 2009. The US is India’s largest investment partner.
China
The world’s most populous country recently surpassed Japan as the second-largest economy. Only the US (China’s top trading partner) still comes out ahead of China’s gross domestic product, which totaled $4.814 trillion in 2009 and grew at a rate of 8.7 percent.
China’s economic reforms over the past two decades led to the world’s most drastic reduction in poverty and a corresponding income increase. However, regulation has often not been able to keep pace with the country’s economic growth, leading businesses to cut corners in ways that endanger consumer safety.
Agriculture contributes 11 percent of China’s GDP and industry makes up 48.6 percent in areas such as mining and ore processing, coal, machinery, textiles, and petroleum. Despite its growth, the state-owned sector still makes up about 40 percent of GDP.
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