The BRIC thesis
BRIC or BRICs are terms used in economics to refer to the combination of Brazil, Russia, India, and China.
General thinking is that the term was first prominently used in a thesis of the Goldman Sachs investment bank. The main point of this 2003 paper was to argue that the economies of the BRICs are rapidly developing and by the year 2050 will eclipse most of the current richest countries of the world.
Finally, because of the popularity of the Goldman Sachs thesis “BRIC” and “BRIMC” (M for Mexico), these terms are also extended to “BRICK” (K for Korea) , “BRICS” (S for South Africa), “BRICA” (GCC Arab countries – Saudi Arabia, Qatar, Kuwait, Bahrain, UAE) and “BRICET” (including Eastern Europe and Turkey) have become more generic marketing terms to refer to these emerging markets.
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 of 15.435 trillion dollars. On almost every scale, they would be the largest entity on the global stage. 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. 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.
Dreaming with BRICs: The Path to 2050
The BRIC thesis (defended in the paper Dreaming with BRICs: The Path to 2050) recognizes that Brazil, Russia, India and China have changed their political systems to embrace global capitalism. Goldman Sachs predicts China and India, respectively, to be the dominant global suppliers of manufactured goods and services while Brazil and Russia would become similarly dominant as suppliers of raw materials. 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 G8 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. 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. BRIC is the future.
source : wikipedia
2 Responses to “The BRIC thesis”
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BRIC – the four most powerful countries in the world. Brazil – huge natural resources (rain forests, amazon river etc.) Russia – the whole Mendelejev periodic table can be found in this huge country, India – Bollywood, their IT specialists are getting better and better, and China – the biggest factory in the world. I think in 2050 this four countries will rule the world.
We also agree that these 4 economies look like the future power houses of the world. But as far an tourism and overseas investment real estate and property we cant help but point out that Brazil is far superior.
Some of this predicted economic growth in Brazil is of course the booming tourist and tourist residential property market especially in the North east region of Brazil.
Tourism is increasing rapidly and constantly with an increasing number of visitors and holiday makers heading to Brazil and especially as Brazil is hosting the Football world cup in 2014 the economic outlook looks very positive indeed. The Brazilian government have identified this trend and the positive impact Tourism is having on the economy as a whole and have therefore invested in infrastructure and other things like marketing and exposure to help drive this trend further.
Brazil property is now on a hot topic with a lot of international property investors and we are seeing more and more activity in the market from both property developers and investors alike. the trend shows no sign of slowing down.