The Brics: Vanguard of the Revolution

INBS 250

October 7, 2016

The BRICs: Vanguard of the Revolution

The acronym BRIC, stands for Brazil, Russia, India, and China. Jim O’Neil, from investment bank Goldman Sachs, originated the term in a paper called “Building a better Global Economic BRICs.” The BRICs are made up of nearly 2.8 billion people, roughly 40 percent of the planets population, spread over three continents. The BRIC still account for around 30 percent of the world’s GDP, and is projected to increase. Statistically, China is leading the BRICs in population, followed by India. Russia is leading them in area, which can benefit them in the long run. Brazil and India aren’t statistically as good in some areas but India plays a main role with China. China seems to be the super power out of them all. (First in Labor force, GDP (Purchasing power parity), Exports). BRICs are high up on the scale of scope compared to other emerging markets, but it is important to recognize any possible uncontrollable threats that may occur. Also the fact that projections are solely based on the assumptions, and do not take into consideration that resources are not limitless and not always readily available.

4-3. Estimate the likely market evolution of the BRICs over the next decade. What economic indicators might companies monitor to best guide their investments and actions?

The projections for the BRICs economy is quite strong. Over the next decade the GDP is projected to be somewhere between 38 percent and 45 percent. If the GNI per capita continues to increase so will the consumer demand. The book states that “consumer demand takes off when GNI per capita is between US $3,000 and $10,000.” As income grows the demand for unattainable products increases. The increase in the growing middle class will eventually help BRIC move away from poverty and in turn will be appealing to investors. Some economic indicators that companies might use to best guide their investments and actions might be, PPP(Purchasing Power Parity), GNI(Gross National Income) and HDI (Human Development Index). Besides keeping an eye on macroeconomic policies, companies may also want to watch out for the rule of law, openness to trade and capital, and strong education systems in BRICs.

4-4. Identify three implications of the emergence of the BRICs for careers and companies in your country.

The emergence of the BRICs may impact the US, if China and India become the world’s dominate suppliers of manufactured goods and services, but also if Brazil and Russia gain strength as suppliers of raw materials. On the other hand, it could also pose as a possible foreign expansion opportunity for the United States due to