In economics, BRIC is a grouping acronym that refers to the countries of B razil , R ussia , I ndia and C hina , which are all deemed to be at a similar stage of newly advanced economic development. It is typically rendered as "the BRICs " or "the BRIC countries" or "the BRIC economies" or alternatively as the "Big Four".

A related acronym, BRICS , adds S outh Africa. There are arguments that I ndonesia should be included into grouping, effectively turning it into BRIIC or BRIICS. Previously BRIC was coined by Jim O'Neill in as an acronym of 4 countries which are all deemed to be at a similar stage of newly advanced economic development, [3] [4] [5] [6] but in the leaders of BRIC countries made the first summit and in BRIC became a formal institution. But future of BRIC as an economy group is questionable.

In , a book with title 'Breakout Nations' mentioned that it is hard to sustain rapid growth for more than a decade. And in , only India can lure global investors, China struggles with its slow down, while Brazil and Russia are in heavy recessions. The economic potential of Brazil , Russia , India and China is such that they could become among the four most dominant economies by the year The thesis was proposed by Jim O'Neill , global economist at Goldman Sachs. 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. 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. The BRIC thesis recognizes that Brazil, Russia, India and China have changed their political systems to embrace global capitalism.

Of the four countries, Brazil remains the only polity 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.

In , an economist from Australia predicted that in , based on Gross Domestic Product per capita spending, China will be the first and followed by India and the United States. Indonesia which nowadays does not belong to BRIC countries will jump from 9th position to 4th position. And Brazil will be in fifth position. It is due to the global economic center is shifting from the Atlantic to the Asia Pacific region.

The Goldman Sachs global economics team released a follow-up report to its initial BRIC study in This predicts a massive rise in the size of the middle class in these nations. 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 level of individuals in the more advanced economies will continue to far outstrip the BRIC economic average.

The report also highlights India's inefficient energy consumption 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.

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 million people will move to cities by This will have significant implications for demand for urban infrastructure, real estate, and services. According to a report from Goldman Sachs, China might surpass the United States in equity market capitalization terms by and become the single largest equity market in the world.

China thus became the world's second-largest economy after the United States.

The Reaction of Stock Markets in the BRIC Countries to Economic Policy Uncertainty in the United States by Vichet Sum :: SSRN

Significant increase is caused by Brazilian economic boom on high food and oil prices. Goldman Sachs has quietly closed down its BRIC fund after lost 88 percent of its asset value since and put the fund in emerging markets countries. Historically, Jim O'Neill who coined the term of BRIC was the former chief economist of Goldman Sachs. In , only India can lures global investors, China struggles with its slow down, while Brazil and Russia are in heavy recessions.

The head of emerging markets for Morgan Stanley Investment Management, Ruchir Sharma has released a book in Breakout Nations which mentioned that it is hard to sustain rapid growth for more than a decade.

Based on a March Forbes report, the BRIC countries counted billionaires among their combined populations, exceeding the number of billionaires in Europe, which stood at in A Goldman Sachs paper published in December explained why Mexico was not included in the original BRICs. 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. All data above is from Goldman Sachs, except the USDA column is data from U. Department of Agriculture USDA about World's 20 Largest Economies in , but only 16 match with Goldman Sachs data.

In USDA, Mexico and Indonesia will topple South Korea please see Section Proposed inclusions. There is no South Africa of BRIC S in the above table. In , the sole country from Africa is Nigeria and the US is still number one, but China almost overtakes the US. The following three tables are lists of economies by incremental GDP from to by Goldman Sachs.

They illustrate that the BRICs and N11 nations are replacing G7 nations as the main contributors to world's economic growth.

From to , nine of the ten largest countries by incremental GDP are occupied by the BRICs and N11 nations, in which the United States remains to be the only G7 member as one of the three biggest contributors to the global economic growth.

At World Economic Forum , there are corporate executives from BRIC and other emerging nations out of participants. It is a record number of executives from emerging markets. Nomura Holdings Inc's co-head of global investment banking said that "It's a reflection of where economic power and influence is starting to move.

BRIC's takeover made record by 22 percent of global deals or increase by 74 percent in one year and more than quadruple in the last five years. Various sources 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 Organisation member states include Russia and China, observers include India and the IBSA Trilateral Forum , which unites Brazil, India, and South Africa in annual dialogues.

Also important to note is the G 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" [30] [31] K for South Korea , " BRIMC " [32] [33] M for Mexico , "BRICA" GCC Arab countries— Saudi Arabia , Qatar , Kuwait , Bahrain , Oman and the United Arab Emirates [34] and "BRICET" including Eastern Europe and Turkey [35] have become more generic marketing terms to refer to these emerging markets.

In an August op-ed , Jim O'Neill of Goldman Sachs argued that Africa could be considered the next BRIC.

Proposals include CIVETs Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa , the EAGLES Emerging and Growth-Leading Economies and the 7 percent club which includes those countries which have averaged economic growth of at least 7 percent a year. South Africa sought BRIC membership since and the process for formal admission began as early as August President Jacob Zuma attend the BRICS summit in Sanya in April as a full member. South Africa stands at a unique position to influence African economic growth and investment.

According to Jim O'Neill of Goldman Sachs who originally coined the term, Africa's combined current gross domestic product is reasonably similar to that of Brazil and Russia, and slightly above that of India.

BRIC Stock Markets: An Econometric AnalysisAsia-Pacific Journal of Management Research and Innovation - Jitin Gambhir, Jitender Bhandari,

Jim O'Neill expressed surprise when South Africa joined BRIC since South Africa's economy is a quarter of the size of Russia's the least economically powerful BRIC nation. Further, South Africa's inclusion in BRICS may translate to greater South African support for China in global fora. African credentials are important geopolitically, giving BRICS a four-continent breadth, influence and trade opportunities.

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 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.

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.

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 , Romania , the Czech Republic , Slovakia , Hungary , 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 , Brazil ranked 64th, Russia 42nd, India th and China 89th. By comparison South Korea ranked 24th and Singapore 3rd. Brazil's stock market, the Bovespa , has gone from approximately 9, in September to over 70, in May 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 wrote a book in 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. Martin's study is being further developed by the Federal University of the Minas Gerais State, in Brazil. It has been argued that geographic diversification would eventually generate superior risk-adjusted returns for long-term global investors by reducing overall portfolio risk while capturing some of the higher rates of return offered by the emerging markets of Asia , Eastern Europe and Latin America.

For global investors, India and China constitute both large-scale production platforms and reservoirs of new consumers, whereas Russia is viewed essentially as an exporter of oil and commodities- Brazil and Latin America being somehow "in the middle". 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. 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. 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 foreign-exchange reserves are more than twice as large as those of the other BRICs combined.

This considerable spending gap allowed the Chinese economy to grow at near optimal conditions while many South American and South Asian economies suffered from various development bottlenecks poor transportation, aging power grids, mediocre schools.

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 United States. There is also the possibility of conflict over Taiwan in the case of China, or Ukraine in the case of Russia.

There is also the issue of population growth. The population of Russia has been declining rapidly in the s and only recently did the Russian government predict the population to stabilize and grow in Brazil's and China's populations will begin to decline in several decades, [ citation needed ] 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. Finally, India's relations with Pakistan have always been tense. In , there was a nuclear standoff between Pakistan and India.

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, [ citation needed ] 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: 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". 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 C ountries in E merging M arkets E xcluded by N ew T erminology.

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.

There are no South Africa and no South Korea, Mexico, GCC Arab countries—Saudi Arabia, Qatar, Kuwait, Bahrain, Oman and the United Arab Emirates , Eastern Europe and Turkey as mentioned above. Mexico and South Korea are currently the world's 13th and 15th largest by nominal GDP just behind the BRIC and G7 economies. Jim O'Neill , expert from the same bank and creator of the economic thesis, stated that in 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.

A Goldman Sachs paper published later in December explained why Mexico and South Korea were not included in the original BRICs. According to the paper, [26] 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 to 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.

Primarily, along with the BRICs, [60] Goldman Sachs argues that the economic potential of Brazil, Russia, India, Mexico and China is such that they may become with the United States the six most dominant economies by the year 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 , 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.

South Korea is one of the world's most highly developed countries and including it with developing countries like the BRICs is not deemed correct.

However, commentators such as William Pesek from Bloomberg argue that Korea is "Another 'BRIC' in Global Wall", suggesting that it stands out from the Next Eleven economies with its BRIC-like growth rate, despite its Human Development Index being higher than some of the world's most advanced economies, including France , UK , Austria , Denmark , Finland and Belgium.

South Korean workers are the wealthiest among major Asian countries, with a higher income than Japan and the strongest growth rate in the OECD. 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 Ns.

In terms of GDP per capita PPP , South Korea overtook Spain in According to Citibank, South Korea will continue by overtaking Germany , Britain , Australia and Sweden by , surpassing Canada , Switzerland , Netherlands and Norway by and taking over the United States by to become the world's wealthiest major economy.

While measuring the South Korean economy by nominal GDP is inaccurate as the South Korean won is artificially kept low to boost exports , IMF predicts South Korea's nominal GDP and GDP per capita will surpass Spain in In September , Goldman Sachs published its th Global Economics Paper named "A United Korea?

According to some opinions, a reunited Korea could occur before , [63] or even between and Brazil Michel Temer , President. Russia Vladimir Putin , President. India Narendra Modi , Prime Minister. China Xi Jinping , President General Secretary as de facto leader. From Wikipedia, the free encyclopedia. Not to be confused with BRICS. For other uses, see Bric disambiguation. Building Better Global Economic BRICs, Global Economics Paper No: How Solid are the BRICs?

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