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== See also== |
== See also== |
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*[[Hyperpower]] |
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*[[Potential superpowers]] |
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*[[Second superpower]] |
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*[[Regional power]] |
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*[[Power (international)]] |
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* [[Asian Tigers]] |
* [[Asian Tigers]] |
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* [[Boom and bust]] |
* [[Boom and bust]] |
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* [[Doha Development Agenda]] |
* [[Doha Development Agenda]] |
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* [[Global warming]] |
* [[Global warming]] |
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== External links == |
== External links == |
Revision as of 18:35, 1 March 2006
![](https://upload.wikimedia.org/wikipedia/commons/thumb/b/b1/World-BRICs.png/300px-World-BRICs.png)
BRIC is a term used to refer to the combination of Brazil, Russia, India, and China.
The term was first prominently used in the thesis of the Goldman Sachs investment bank, though it also refers to a trade and cooperation agreement between these countries that was signed in 2002. It has since become a more generic marketing term.
The BRIC thesis
The four countries whose economic potential is such that they may become among the four most dominant economies by the year 2050. The thesis was proposed by Jim O'Neil, global economist at Goldman Sachs. The coalition would encompass over forty percent of the world's population and hold a combined GDP [PPP] of 12.14 trillion dollars. On almost every scale, it would be the largest entity on the global stage. These four countries are not a political alliance (such as the European Union) or any formal trading association, like ASEAN. Nevertheless, these countries signed a trade and cooperation agreement in 2002.
Dreaming with BRICs: The Path to 2050 (2003)
The BRIC thesis (defended in the paper Dreaming with BRICs: The Path to 2050) recognises that Brazil, Russia, India and China have changed their political systems to embrace global capitalism. China and India are predicted to be, one can argue that they are, dominant in the field of manufacturing and also in services (India in particular) while Brazil and Russia would be dominant countries to supply these countries with commodities (soy and iron ore for Brazil, oil from Russia). In this process, commodities, work, technology, and companies have diffused outward from the United States across the world. Following the end of the Cold War or even before, the governments comprising BRIC all initiated economic or political reforms to allow their countries to enter the world economy. In order to compete, these countries have simultaneously stressed education, foreign investment, domestic consumption, and domestic entrepreneurship. According to the study, India has the potential to grow the fastest among the four BRIC countries over the next 30 to 50 years. A major reason for this is that the decline in working age population will happen later for India and Brazil than for Russia and China.
Follow-up report (2004)
The Goldman Sachs global economics team released a follow-up report to its initial BRIC study in 2004. [1] This new report takes the analysis one step forward and focuses on the impact the growth of these four economies will have on global markets. In this report it is estimated that the BRIC economies' share of world growth could rise from 20 % in 2003 to more than 40 % in 2025. Also, their total weight in the world economy would rise from approximately 10 % in 2004 to more than 20 % in 2025. Furthermore, between 2005 and 2015 over 800 million people in these countries will have crossed the annual income threshold of $3,000. In 2025, it is calculated that approximately 200 million people in these economies will have annual incomes above $15,000. Therefore, the huge pickup in demand will not be restricted to basic goods but impact higher-priced branded goods as well. First China and a decade later India would overtake the US as the world's largest car market. Despite the balance of growth swinging so decisively towards the BRIC economies, the average wealth level of individuals in the more advanced economies will continue to far outstrip the BRIC economy average. Goldman Sachs estimates that by 2025 the income/capita in the G6 will exceed $35,000, only about 24 million people in the BRIC economies will have similar income levels. The report also highlights India's great inefficiency in energy use and mentions the dramatic under-representation of these economies in the global capital markets.
Criticism
There are many uncertainties and assumptions in the BRIC thesis that could mean that any or all of these four countries will not live up to their promise. The preeminence of China and India as major manufacturing countries with unrealised potential has been widely recognised, but some commentators state that China's and Russia's lack of full democracy could be a problem in the future, as is the possibility of conflict over Taiwan in the case of China. Likewise, the population of Russia is steadily declining, and this may have implications for its future. The potential of Brazil has been speculated upon for many decades without amounting to fulfilling this potential. Factors such as international conflict, civil unrest, political policy, outbreaks of disease and terrorism are all factors that are difficult to predict and that could have an effect on the destiny of any country.
The agreement
Various sources (see external links below) refer to a purported "original" BRIC agreement that predates the Goldman Sachs thesis. Some of these sources claim that President Vladimir Putin of Russia was the driving force behind this original cooperative coalition of developing BRIC countries. However, thus far, no text has been made public of any formal agreement to which all four BRIC states are signatories. This does not mean, however, that they have not reached a multitude of bilateral or even trilateral agreements. Evidence of agreements of this type are abundant and are available on the foreign ministry websites of each of the four countries. Trilateral agreements and frameworks made among the BRICs include the Shanghai Cooperation Organization (member states include Russia and China, associate members include India) and the IBSA Trilateral Forum, which unites Brazil, India, and South Africa in annual dialogues. Also important to note is the G-20 coalition of developing states which includes all the BRICs except for Russia, which is not a member of the WTO. The G-20 operates during World Trade Organization negotiations.
Marketing
The BRIC term is also used by companies who refer to the four named countries as key to their emerging markets strategies. In reality, the use of this nifty acronym often obscures a lesser role given to Brazil, and sometimes to Russia too. On the other hand, when Russia is used as a loose term to include all of Eastern Europe as well, the attention is more serious.
See also
- Hyperpower
- Superpower
- Potential superpowers
- Major power
- Second superpower
- Regional power
- Power (international)
- Asian Tigers
- Boom and bust
- China's military expenditure
- China's peaceful rise
- Doha Development Agenda
- Global warming