BRIC

Brazil, Russia, India, and China

Map of BRIC countries BRIC Brazil President (head of state and government): Luiz Inácio Lula da Silva Russia President (head of state): Dmitry Medvedev Prime Minister (head of government): Vladimir Putin India President (head of state): Pratibha Patil Prime Minister (head of government): Manmohan Singh China President (head of state): Hu Jintao Premier (head of government): Wen Jiabao GDP (PPP) Total : $18,486 billion (2010 estimate) China $10,084 billion India $4,001 billion Russia $2,219 billion Brazil $2,182 billion GDP (nominal) Total : $10,676 billion (2010 estimate) China $5,745 billion Brazil $2,024 billion Russia $1,477 billion India $1,430 billion Area Total : 38,518,338 km2 (2010 estimate) Russia 17,075,400 km2 China 9,640,821 km2 Brazil 8,514,877 km2 India 3,287,240 km2 Population Total : 2,851,302,297 (2010 estimate) China 1,336,970,000 India 1,179,618,000 Brazil 192,787,000 Russia 141,927,297

In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries" or known as the "Big Four") is a grouping acronym that refers to the countries of Brazil, Russia, India, and China that are deemed to all be at a similar stage of newly advanced economic development.

The acronym was coined by Jim O'Neill in a 2001 paper entitled "The World Needs Better Economic BRICs". The acronym has come into widespread use as a symbol of the shift in global economic power away from the developed G7 economies toward the developing world.

According to a paper published in 2005, Mexico and South Korea are the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed as they are already members of the OECD. 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. The four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.

Goldman Sachs did not argue that the BRICs would organize themselves into an economic bloc, or a formal trading association, as the European Union has done. However, there are some 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". On June 16, 2009, the leaders of the BRIC countries held their first summit in Yekaterinburg, and issued a declaration calling for the establishment of a equitable, democratic and a multipolar world order.

The BRIC thesis

Moscow, Russia.

File:Prabhadevi Worli Skyline.jpg

Mumbai, India.

File:Sao Paulo - Brooklin.jpg

São Paulo, Brazil.

Shanghai, China.

Goldman Sachs argues that the economic potential of Brazil, Russia, India, and China is such that they could 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 25% of the world's land coverage and 40% 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 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. 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.

(2003) Dreaming with BRICs: The Path to 2050

Here's what Goldman Sachs had to say in its original report (defended in the paper Dreaming with BRICs: The Path to 2050) "Dreaming with BRICS: The Path to 2050," published in 2003:

• China's economy will surpass Germany in the next few years, Japan by 2015, and the United States by 2041.
• India's growth rate will be the highest—not China's -- and it will overtake Japan (today the world's second-largest economy) by 2032.
• BRICs’ currencies could appreciate by 300% over the next 50 years, providing a big tailwind for investors in BRIC assets.
• Taken together, the BRICs could be larger than the United States and the developed economies of Europe within 40 years.
• By 2025, BRICs will bring another 200 million people with incomes above $15,000 into the world's economy. That's equal to the combined populations of Germany, France and the United Kingdom.

However, Goldman Sachs has now become more bullish on the BRICs since it published its original report. The size of China's economy overtook Germany's economy in 2007, a year earlier than expected, and has over taken Japan's in July, 2010. Goldman Sachs now believes that the Chinese economy will overtake the United States by 2027. And with India accounting for 10 of the 30 fastest-growing urban areas in the world and 700 million people moving to cities by 2050, its influence on the world economy will be bigger and quicker than was implied in 2003.

The BRIC thesis recognizes that Brazil, Russia, India and China have changed their political systems to embrace global capitalism. Goldman Sachs predicts that China, Brazil and India, respectively, will become the dominant global suppliers of manufactured goods and services, while Brazil and Russia will become similarly dominant as suppliers of raw materials. It should be noted that of the four countries, Brazil remains the only nation that has the capacity to continue all elements, meaning manufacturing, services, and resource supplying simultaneously. Cooperation is thus hypothesized to be a logical next step among the BRICs because Brazil and Russia together form the logical commodity suppliers to India and China. Thus, the BRICs have the potential to form a powerful economic bloc to the exclusion of the modern-day states currently of "Group of Eight" status. Brazil is dominant in soy and iron ore while Russia has enormous supplies of oil and natural gas. Goldman Sachs' thesis thus documents how 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.

(2004) Follow-up report

The Goldman Sachs global economics team released a follow-up report to its initial BRIC study in 2004. The report states that in BRIC nations, the number of people with an annual income over a threshold of $3,000, will double in number within three years and reach 800 million people within a decade. This predicts a massive rise in the size of the middle class in these nations. In 2025, it is calculated that the number of people in BRIC nations earning over $15,000 may reach over 200 million. This indicates that a huge pickup in demand will not be restricted to basic goods but impact higher-priced goods as well. According to the report, first China and then a decade later India will begin to dominate the world economy.

Yet 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 economic average. Goldman Sachs estimates that by 2025 the income per capita in the six most populous EU countries will exceed $35,000, whereas only about 500 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. The report also emphasizes the enormous populations that exist within the BRIC nations, which makes it relatively easy for their aggregate wealth to eclipse the G6, while per-capita income levels remain far below the norm of today's industrialized countries. This phenomenon, too, will affect world markets as multinational corporations will attempt to take advantage of the enormous potential markets in the BRICs by producing, for example, far cheaper automobiles and other manufactured goods affordable to the consumers within the BRICs in lieu of the luxury models that currently bring the most income to automobile manufacturers. India and China have already started making their presence felt in the service and manufacturing sector respectively in the global arena. Developed economies of the world have already taken serious note of this fact.

(2007) Second Follow-up report

This report compiled by lead authors Tushar Poddar and Eva Yi gives insight into "India's Rising Growth Potential". It reveals updated projection figures attributed to the rising growth trends in India over the last four years. Goldman Sachs assert that "India's influence on the world economy will be bigger and quicker than implied in our previously published BRICs research". They noted significant areas of research and development, and expansion that is happening in the country, which will lead to the prosperity of the growing middle-class.

"India has 10 of the 30 fastest-growing urban areas in the world and, based on current trends, we estimate a massive 700 million people will move to cities by 2050. This will have significant implications for demand for urban infrastructure, real estate, and services."

In the revised 2007 figures, based on increased and sustaining growth, more inflows into foreign direct investment, Goldman Sachs predicts that "from 2007 to 2020, India's GDP per capita in US$ terms will quadruple", and that the Indian economy will surpass the United States (in US$) by 2043. It states that the four nations as a group will overtake the G7 in 2032.

(2010) EM Equity in Two Decades: A Changing Landscape

According to a new report from Goldman Sachs, China might surpass the US in equity market capitalization terms by 2030 and become the single largest equity market in the world. By 2020, US GDP might be only slightly larger than China's GDP.

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, while economic arguments can be made for linking Mexico into the BRIC thesis, the case for including South Korea looks considerably weaker. A Goldman Sachs paper published later in December 2005 explained why Mexico was not included in the original BRICs.

Global giants

Painting BRIC by numbers

Categories	Brazil	Russia	India	China
Area	5th	1st	7th	3rd
Population	5th	9th	2nd	1st
Population growth rate	107th	221st	90th	156th
Labour force	5th	7th	2nd	1st
GDP (nominal)	8th	12th	11th	2nd
GDP (PPP)	9th	7th	4th	2nd
GDP (nominal) per capita	60th	59th	139th	98th
GDP (PPP) per capita	75th	51st	128th	97th
GDP (real) growth rate	113st	206th	6th	3rd
Human Development Index	75th	71st	134th	92nd
Exports	23rd	12th	18th	1st
Imports	24th	14th	15th	2nd
Current account balance	47th	5th	169th	1st
Received FDI	11th	12th	29th	5th
Foreign exchange reserves	7th	3rd	5th	1st
External debt	28th	24th	26th	23rd
Public debt	47th	122nd	29th	98th
Electricity consumption	9th	4th	5th	2nd
Number of mobile phones	5th	4th	2nd	1st
Number of internet users	5th	8th	4th	1st
Motor vehicle production	6th	19th	7th	1st
Military expenditures	12th	5th	10th	2nd
Active troops	14th	5th	3rd	1st
Rail network	10th	2nd	4th	3rd
Road network	4th	8th	3rd	2nd

BRIC in future

The list of 22 selected countries by nominal GDP from year 2006 to 2050: BRICs, G7 and Next Eleven. The bottom chart list the same 22 countries by nominal GDP per capita (the rankings for this bottom chart do not reflect the GDP per capita for all the world's countries). BRIC countries are highlighted and labeled in bold. Rank 2006: Number 1 to 15 are G20 countries. Five other countries of G20 not in the list are: Argentina, Australia, Saudi Arabia, South Africa and European Union. Number 1 to 8 are also G7 countries, except China. Since 2027 China will surpass USA. Rank 2050: Top7 countries are: 1.China, 2.USA, 3.India, 4.Brazil, 5.Mexico, 6.Russia and 7.Indonesia (All 4 BRIC countries plus USA, Mexico and Indonesia). G7 countries at 2006 which not include in Top7 2050 countries are: Japan(rank8), Germany(10), United Kingdom(9), France(12), Italy(18) and Canada(16). So only USA from G7 2006 will be one of the Top 7 countries in 2050. Figures reflect data published in 2007.

Gross Domestic Product [2006-2050] (in US2006$ billions)

Rank 2006	Country	2006	2010	2015	2020	2025	2030	2035	2040	2045	2050	Rank 2050
1	United States	13,245	14,535	16,194	17,978	20,087	22,817	26,097	29,823	33,904	38,514	2
2	Japan	4,336	4,604	4,861	5,224	5,570	5,814	5,886	6,042	6,300	6,677	8
3	Germany	2,851	3,083	3,326	3,519	3,631	3,761	4,048	4,388	4,714	5,024	10
4	China	2,682	4,667	8,133	12,630	18,437	25,610	34,348	45,022	57,310	70,710	1
5	United Kingdom	2,310	2,546	2,835	3,101	3,333	3,595	3,937	4,344	4,744	5,133	9
6	France	2,194	2,366	2,577	2,815	3,055	3,306	3,567	3,892	4,227	4,592	12
7	Italy	1,809	1,914	2,072	2,224	2,326	2,391	2,444	2,559	2,737	2,950	18
8	Canada	1,260	1,389	1,549	1,700	1,856	2,061	2,302	2,569	2,849	3,149	16
9	Brazil	1,064	1,346	1,720	2,194	2,831	3,720	4,963	6,631	8,740	11,366	4
10	Russia	982	1,371	1,900	2,554	3,341	4,265	5,265	6,320	7,420	8,560	6
11	India	909	1,256	1,900	2,848	4,316	6,683	10,514	16,510	25,278	37,668	3
12	South Korea	887	1,071	1,305	1,508	1,861	2,241	2,644	3,089	3,562	4,083	13
13	Mexico	851	1,009	1,327	1,742	2,303	3,068	4,102	5,471	7,204	9,340	5
14	Turkey	390	440	572	740	965	1,279	1,716	2,300	3,033	3,943	14
15	Indonesia	350	419	562	752	1,033	1,479	2,192	3,286	4,846	7,010	7
16	Iran	245	312	415	544	716	953	1,273	1,673	2,133	2,663	19
17	Pakistan	129	161	206	268	359	497	709	1,026	1,472	2,085	21
18	Nigeria	121	158	218	306	445	680	1,083	1,765	2,870	4,640	11
19	Philippines	117	162	215	289	400	582	882	1,353	2,040	3,010	17
20	Egypt	101	129	171	229	318	467	718	1,124	1,728	2,602	20
21	Bangladesh	63	81	110	150	210	304	451	676	1,001	1,466	22
22	Vietnam	55	88	157	273	458	745	1,169	1,768	2,569	3,607	15

The five largest economies in the world in 2050, measured in GDP nominal (millions of USD), according to Goldman Sachs.

For the table below: Indonesia as one of BRICI (BRIC plus Indonesia) countries labelled in italic bold (South Korea, Mexico and Vietnam also in italic bold). Rank 2006: Number 1 to 7 are G7 countries. Rank 2050: Number 1.USA, 2.South Korea, 3.United Kingdom and 4.One of BRICI countries (Russia). Together with Mexico, the other 5 of G7 countries will be after Russia and will be the best-10 of GDP/Capita. All of G7 approximately double their GDP per Capita as at 2050 compare to 2006. But the highest growth is made by Vietnam which will make their GDP per Capita 51.10x (2006 to 2050). The second and third best growth are made by BRICI countries: India (25.5x) and China (24.32x). The other 3 BRICI countries also make a significantly growth: Indonesia (14.85x), Russia (11.37x) and Brazil (8.79x).

Gross Domestic Product per capita (nominal) [2006-2050]

Rank 2006	Country	2006	2010	2015	2020	2025	2030	2035	2040	2045	2050	Rank 2050	2050/ 2006
1	United States	44,379	47,014	50,200	53,502	57,446	62,717	69,019	76,044	83,489	91,683	1	2.06
2	United Kingdom	38,108	41,543	45,591	49,173	52,220	55,904	61,049	67,391	73,807	80,234	3	2.10
3	Canada	38,071	40,541	43,449	45,961	48,621	52,663	57,728	63,464	69,531	76,002	5	1.99
4	France	36,045	38,380	41,332	44,811	48,429	52,327	56,562	62,136	68,252	75,253	6	2.08
5	Germany	34,588	37,474	40,589	43,223	45,033	47,263	51,710	57,118	62,658	68,253	7	1.97
6	Japan	34,021	36,194	38,650	42,385	46,419	49,975	52,345	55,756	60,492	66,846	8	1.96
7	Italy	31,123	32,948	35,908	38,990	41,358	43,195	44,948	48,070	52,760	58,545	10	1.88
8	South Korea	18,161	21,602	26,012	29,868	36,813	44,602	53,449	63,924	75,979	90,294	2	4.97
9	Mexico	7,918	8,972	11,176	13,979	17,685	22,694	29,417	38,255	49,393	63,149	9	7.97
10	Russia	6,909	9,833	13,971	19,311	26,061	34,368	43,800	54,221	65,708	78,576	4	11.37
11	Brazil	5,657	6,882	8,427	10,375	12,996	16,694	21,924	29,026	38,149	49,759	11	8.79
12	Turkey	5,545	6,005	7,460	9,291	11,743	15,188	20,046	26,602	34,971	45,595	13	8.22
13	Iran	3,768	4,652	5,888	7,345	9,328	12,139	15,979	20,746	26,231	32,676	15	8.67
14	China	2,041	3,463	5,837	8,829	12,688	17,522	23,511	30,951	39,719	49,650	12	24.32
15	Indonesia	1,508	1,724	2,197	2,813	3,711	5,123	7,365	10,784	15,642	22,395	16	14.85
16	Philippines	1,312	1,688	2,075	2,591	3,372	4,635	6,678	9,815	14,260	20,388	19	15.53
17	Egypt	1,281	1,531	1,880	2,352	3,080	4,287	6,287	9,443	14,025	20,500	18	16.00
18	Nigeria	919	1,087	1,332	1,665	2,161	2,944	4,191	6,117	8,934	13,014	20	14.16
19	India	817	1,061	1,492	2,091	2,979	4,360	6,524	9,802	14,446	20,836	17	25.50
20	Pakistan	778	897	1,050	1,260	1,568	2,035	2,744	3,775	5,183	7,066	21	9.08
21	Vietnam	655	1,001	1,707	2,834	4,583	7,245	11,148	16,623	23,932	33,472	14	51.10
22	Bangladesh	427	510	627	790	1,027	1,384	1,917	2,698	3,767	5,235	22	12.25

BRIC summits

Leaders at the 1st BRIC summit. From left are: President Luiz Inácio Lula da Silva of Brazil; President Dmitry Medvedev of Russia; President Hu Jintao of China, and Prime Minister Manmohan Singh of India.

The BRIC countries met for their first official summit on 16 June 2009, in Yekaterinburg, Russia, with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India and China, all attending. The core focus of the summit was related to improving the current global economic situation and discussing how the four countries can better work together in the future, as well as a more general push to reform financial institutions. There was also discussion surrounding how developing nations, such as those members of BRIC, could be better involved in global affairs in the future. In the aftermath of the summit the BRIC nations suggested that there was a need for a new global reserve currency that is 'diversified, stable and predictable'. The statement that was released stopped short of making a direct attack on the perceived 'dominance' of the US dollar, something which the Russians have been critical of; however, it still led to a fall in the value of the dollar against other major currencies.

The foreign ministers of the BRIC countries had met previously on May 16, 2008 also in Yekaterinburg.

One week prior to the summit, Brazil offered $10 billion to the International Monetary Fund. It was the first time that the country had ever made such a loan. Brazil had previously received loans from the IMF and this announcement was treated as a significant demonstration of how Brazil's economic position had changed. China also announced plans to invest a total of $50.1 billion and Russia planned to invest $10 billion.

Summit	Date	Host country	Host leader	Location held
1st	June 16, 2009	Russia	Dmitry Medvedev	Yekaterinburg
2nd	April 16, 2010	Brazil	Luiz Inácio Lula da Silva	Brasília
3rd	2011	China	Hu Jintao	Beijing
4th	2012	India	-	-

The BRIC term

The BRIC leaders in 2009

The BRIC leaders in 2010

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 quadrilateral 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.

Also, because of the popularity of the Goldman Sachs thesis "BRIC", this term has sometimes been extended whereby "BRICK" (K for South Korea), "BRIMC" (M for Mexico), "BRICA" (GCC Arab countries – Saudi Arabia, Qatar, Kuwait, Bahrain, Oman and the United Arab Emirates) and "BRICET" (including Eastern Europe and Turkey) have become more generic marketing terms to refer to these emerging markets.

Marketing

The São Paulo's Stock Exchange is the second largest stock in market value in the world.

The BRIC term is also used by companies who refer to the four named countries as key to their emerging markets strategies. By comparison the reduced acronym IC would not be attractive, although the term "Chindia" is often used. The BRIC's study specifically focuses on large countries, not necessarily the wealthiest or the most productive and was never intended to be an investment thesis. If investors read the Goldman's research carefully, and agreed with the conclusions, then they would gain exposure to Asian debt and equity markets rather than to Latin America. According to estimates provided by the USDA, the wealthiest regions outside of the G6 in 2015 will be Hong Kong, South Korea and Singapore. Combined with China and India, these five economies are likely to be the world's five most influential economies outside of the G6.

A view of the Rajiv Gandhi Salai in Chennai, an emerging destination for outsourcing

On the other hand, when the "R" in BRIC is extended beyond Russia and is used as a loose term to include all of Eastern Europe as well, then the BRIC story becomes more compelling. At issue are the multiple serious problems which confront Russia (potentially unstable government, environmental degradation, critical lack of modern infrastructure, etc.), and the comparatively much lower growth rate seen in Brazil. However, Brazil's lower growth rate obscures the fact that the country is wealthier than China or India on a per-capita basis, has a more developed and global integrated financial system and has an economy potentially more diverse than the other BRICs due to its raw material and manufacturing potential. Many other Eastern European countries, such as Poland, the Czech Republic, Slovakia, Hungary, Romania, Bulgaria, and several others were able to continually sustain high economic growth rates and do not experience some of the problems that Russia experiences or experience them to a lesser extent. In terms of GDP per capita in 2008, Brazil ranked 64th, Russia 42nd, India 113th and China 89th. By comparison South Korea ranked 24th and Singapore 3rd.

Brazil's stock market, the Bovespa, has gone from approximately 9,000 in September 2002 to over 70,000 in May 2008. Government policies have favored investment (lowering interest rates), retiring foreign debt and expanding growth, and a reformulation of the tax system is being voted in the congress. The British author and researcher Mark Kobayashi-Hillary is editing a new book titled 'Building a Future with BRICs' for European publisher Springer Verlag that examines the growth of the BRICs region and its effect on global sourcing. Contributors to the book include Nandan Nilekani, and Shiv Nadar, with publication scheduled for October 2007.

The BRIC and International Law

Brazilian lawyer and author Adler Martins has published a paper called "Contratos Internacionais entre os países do BRIC" (International Agreements Among BRIC countries) which highlights the international conventions ratified by the BRIC countries, which allow them to maintain trade and investment activities safely within the group. Mr. Martin's study is being further developed by the Federal University of the Minas Gerais State, in Brazil.

Criticism

A criticism is that the BRIC projections are based on the assumptions that resources are limitless and endlessly available when needed. In reality, many important resources currently necessary to sustain economic growth, such as oil, natural gas, coal, other fossil fuels, and uranium might soon experience a peak in production before enough renewable energy can be developed and commercialized, which might result in slower economic growth than anticipated, thus throwing off the projections and their dates. The economic emergence of the BRICs will have unpredictable consequences for the global environment. Indeed, proponents of a set carrying capacity for the Earth may argue that, given current technology, there is a finite limit to how much the BRICs can develop before exceeding the ability of the global economy to supply.

Academics and experts have suggested that China is in a league of its own compared to the other BRIC countries. As David Rothkopf wrote in Foreign Policy, "Without China, the BRICs are just the BRI, a bland, soft cheese that is primarily known for the wine that goes with it. China is the muscle of the group and the Chinese know it. They have effective veto power over any BRIC initiatives because without them, who cares really? They are the one with the big reserves. They are the biggest potential market. They are the U.S. partner in the G2 (imagine the coverage a G2 meeting gets vs. a G8 meeting) and the E2 (no climate deal without them) and so on." Deutsche Bank Research said in a report that "economically, financially and politically, China overshadows and will continue to overshadow the other BRICs." It added that China's economy is larger than that of the three other BRIC economies (Brazil, Russia and India) combined. Moreover, China's exports and its official forex reserve holdings are more than twice as large as those of the other BRICs combined.

Another criticism is the understatement of GDP growth in China over the next 45 years; which predicts growth falling far below normal development. This contradicts the rapid economic growth that has already taken place in the country and the experience of countries like South Korea catching up with western GDP per capita, which China has been growing faster than in a similar period of development.

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 large-scale disregard for human rights and democracy could be a problem in the future. Human rights issues do not inform the foreign policies of these two countries to the same extent as they do the policies of other large states such as Japan, India, the EU states and the USA. There is also the possibility of conflict over Taiwan in the case of China and smaller democracies that lie in the vicinity of these two authoritarian giants will no doubt be affected by human rights issues being relegated to a lower global priority.

There is also the issue of population growth. The population of Russia is beginning to shrink fast. Brazil's and China's populations will begin to decline in several decades, with their demographic windows closing in several decades as well. This may have implications for those countries' future, for there might be a decrease in the overall labor force and a negative change in the proportion of workers to retirees.

Brazil's economic potential has been anticipated for decades, but it had until recently consistently failed to achieve investor expectations. Only in recent years has the country established a framework of political, economic, and social policies that allowed it to resume consistent growth. The result has been solid and paced economic development that rival its early 70's "miracle years", as reflected in its expanding capital markets, lowest unemployment rates in decades, and consistent international trade surpluses - that led to the accumulation of reserves and liquidation of foreign debt (earning the country a coveted investment grade by the S&P and Fitch Ratings in 2008).

Finally, India's relations with its neighbor Pakistan have always been tense. In 1998, there was a nuclear standoff between Pakistan and India. Border conflicts with Pakistan, mostly over the longheld dispute over Kashmir, has further aggravated any economic ties. The BRIC countries have enormous populations of extremely impoverished people. This impedes progress by limiting government finances, increasing social unrest, and limiting potential domestic economic demand. Factors such as international conflict, civil unrest, unwise 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.

Other critics suggest that BRIC is nothing more than a neat acronym for the four largest emerging market economies, but in economic and political terms nothing else (apart from the fact that they are all big emerging markets) links the four. Two are manufacturing based economies and big importers (China and India), but two are huge exporters of natural resources (Brazil and Russia). The Economist, in its special report on Brazil, expressed the following view: "In some ways Brazil is the steadiest of the BRICs. Unlike China and Russia it is a full-blooded democracy; unlike India it has no serious disputes with its neighbors. It is the only BRIC without a nuclear bomb." The Heritage Foundation's "Economic Freedom Index", which measures factors such as protection of property rights and free trade ranks Brazil ("moderately free") above the other BRICs ("mostly unfree"). Henry Kissinger has stated that the BRIC nations have no hope of acting together as a coherent bloc in world affairs, and that any cooperation will be the result of forces acting on the individual nations.

It is also noticed that BRIC countries have undermined qualitative factors that is reflected in deterioration in Doing Business ranking 2010 and other several human indexes.

In a not-so-subtle dig critical of the term as nothing more than a shorthand for emerging markets generally, critics have suggested a correlating term, CEMENT (Countries in Emerging Markets Excluded by New Terminology). Whilst they accept there has been spectacular growth of the BRIC economies, these gains have largely been the result of the strength of emerging markets generally, and that strength comes through having BRICs and CEMENT.

Other additions

Mexico and South Korea are currently the world's 13th and 15th largest by nominal GDP, just behind the BRIC and G7 economies, while both are experiencing rapid 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 South 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. However, due to the popularity of the Goldman Sachs thesis, "BRIMC" and "BRICK" 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 as 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.

Mexico

File:Santa feconj.jpg

Mexico City, Mexico

Primarily, along with the BRICs, Goldman Sachs argues that the economic potential of Brazil, Russia, India, Mexico and China is such that they may become (with the USA) the six 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. Goldman Sachs did not 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 also contributes to the nation's economy by creating a large domestic consumer market which in turn creates more jobs.

Mexico in 2050

	Mexico
GDP in USD	$9.340 trillion
GDP per capita	$63,149
GDP growth (2015–2050)	4.0%
Total population	148 million

South Korea & United Korea

File:Gangnam-gu, Seoul, South Korea - February 2009.jpg

Seoul, South Korea

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 (Goldman Sachs' way of measuring the long-term sustainability of growth) than all of the BRICs or N-11s. Commentators 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 (N-11). 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, suggesting that wealth is more important than size for bond investors, stating that Korea's credit rating will be rated AAA sooner than 2050.

Korea in 2050

	United Korea	South Korea	North Korea
GDP in USD	$6.056 trillion	$4.073 trillion	$1.982 trillion
GDP per capita	$86,000	$96,000	$70,000
GDP growth (2010–2050)	4.1%	3.3%	12.4%
Total population	71 million	42 million	28 million

In September 2009, Goldman Sachs published its 188th Global Economics Paper named "A United Korea?" which highlighted in detail the potential economic power of a United Korea, which will surpass all current G7 countries except the United States, such as Japan, the United Kingdom, Germany and France within 30–40 years of reunification, estimating GDP to surpass $6 trillion by 2050. 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. According to some opinions, a reunited Korea could occur before 2050, or even between 2010 and 2020. If it occurred, Korean reunification would immediately raise the country's population to over 70 million.

Indonesia

Indonesia is the world's fourth most populous country after China, India and the USA. In 2009, BRIC and Indonesia represented about 42 and 3 percent of the world's population respectively and about 15 percent of global GDP altogether. All of them are G20 countries. By 2015, Internet users in BRIC + Indonesia will double to 1.2 billion. At 2009, Indonesia was the only member of the G20 to lower its public debt-to-GDP ratio: a very positive economic management indicator.

October 2010: Wealth has surged in emerging markets in Asia Pasific, especially India and Indonesia. In the last ten years the total wealth of India has tripled to $3.5trillion while Indonesia's has grown five fold to $1.8trillion. The inaugural report by the Credit Suisse Research Institute defines wealth as the value of financial assets and non-financial assets (mainly real estate), minus household debt.

See also

• Potential superpower
• Emerging markets
• Next Eleven
• Asian Union
• North American Union
• CIVETS
• G8
• G20
• BASIC countries
• PIGS
• MAP countries

Bibliography

• Elder, Miriam, and Leahy, Joe, et al., Who's who: Bric leaders take their place at the top table, Financial Times, London, September 25, 2008
• O'Neill, Jim, BRICs could point the way out of the Economic Mire, Financial Times, London, September 23, 2008, p. 28.
• Mark Kobayashi-Hillary, 'Building a Future with BRICs: The Next Decade for Offshoring' (Nov 2007). ISBN 978-3-540-46453-2.

External links

• BRIC : Indonesia Should Join In BRIC Economic Group
• Business news from the BRIC countries
• Goldman Sachs: The BRICs Dream: Web Tour, July 2006
• Grant Thornton IBR - Emerging markets: reshaping the global economy. May 2008
• Grant Thornton IBR - Emerging markets (BRIC) focus. 2007
• Thomas Harr, Senior Analyst, Danske Bank: BRIC The Major Issues; June 2006
• Kristalina Georgieva, Country Director Russian Federation, World Bank: BRIC Countries in Comparative Perspective, 2006
• Article on Brics from the Danish National Bank with extensive statistics and comaprisons with G7 countries and Denmark
• Businessweek article on Goldman Sach's predictions regarding BRIC
• Goldman Sach's predictions for BRIC (PDF)
• "Mapping the Global Future: Report of the National Intelligence Council's 2020 Project" - National Intelligence Council report and Forecast
• Luxury Marketing in BRIC Countries: When Fashion and Foreign Policy Converge. Market segment analysis by Criterion Global, International Media Buying firm
• BBC Documentary Archive - four part audio documentary
• BRIC's on BRIC's program : Harnessing growth in new realities at Fundaçao dom Cabral, 13th business school in the world
• Goldman Sachs - Global Economics Paper No. 99: Dreaming with BRICs: The Path to 2050, October, 2003 (PDF)
• Goldman Sachs - How Solid are the BRICs? December, 2005 (PDF)
• Goldman Sachs - Is this the ‘BRICs Decade’? May, 2010 (PDF)
• Who’s the best Bric now? September, 2010