Increasingly, the BRICS nations Brazil, Russia, India, China and South Africa are searching for better

er coordination of their political positions concerning world affairs and improved cooperation among members for economic growth. The emergence of the BRICS corresponded to the desire of these emerging states to play a greater role in the world. BRICS members account for a significant portion of world share in terms of population, territory size and importance of their economies. However, their overall economic development is still disproportional to their national endowments and aspirations as global leaders. Consequently, BRICS are politically underrepresented in todays world. Some of them, endowed with a large population, represent a mere 3% of per capita GDP compared with other superpowers. Despite the recent decolonization that certain BRICS have experienced, they have a long way to go before attaining their rightful international positions. The BRICS constellation is meant to address these deficits. In a globalized world, all BRICS states are actively engaging the world to boost their economy, including collaborating with industrialized countries. This indeed has facilitated their fast growth in the past decades. Meanwhile, there are ample opportunities for BRICS nations to work together, as they benefit more or less from their own complementarities in terms of capital and human resources, production and consumption forces, plus varied technological stocks suited to their needs. An improved economic cooperation among BRICS states could promote their common voices to advance global equality and fairness. For political and developmental issues, such as dealing with the Libya and Syria cases, as well as coping with global warming, BRICS nations have their perspectives, which deserve proper respect. By striking a balance with the industrialized countries, the emergence of BRICS promises to improve the world through stronger global governance.

It is clear that the BRICS nations do not share the same views at all times. Nevertheless, through better cooperation, they are better poised to reduce tensions and enhance trust. The fourth BRICS summit in India is likely to deepen their dialogue regarding financial and banking collaboration by achieving a commitment to conducting more trade with domestic currencies at a time of global economic downturn. Incrementally, BRICS will take their rightful place in world economy and politics.

Shen Dingli, Professor and Executive Dean, Institute of International Studies, Fudan University, Peoples Republic of China

Background The BRIC countries label refers to a select group of four large, developing countries (Brazil, Russia, India and China). The four BRIC countries are distinguished from a host of other promising emerging markets by their demographic and economic potential to rank among the worlds largest and most influential economies in the 21st century (and by having a reasonable chance of realizing that potential). Together, the four original BRIC countries comprise more than 2.8 billion people or 40 percent of the worlds population, cover more than a quarter of the worlds land area over three continents, and account for more than 25 percent of global GDP Path A countrys population and demographics, among other factors, directly affect the potential size of its economy and its capacity to function as an engine of global economic growth and development. As early as 2003, Goldman Sachs forecasted that China and India would become the first and third largest economies by 2050, with Brazil and Russia capturing the fifth and sixth spots. The chart below shows a more recent forecast of the world ranking of the biggest economies in the year 2050. (Click on the image below to view the full-size chart in a separate tab or browser window.

One BRIC, Two BRICs

The BRIC designation was first coined by Jim ONeil of Goldman Sachs in a 2001 paper titled The World Needs Better Economic BRICs. The BRIC countries have since gone on to meet and seek out opportunities for cooperation in trade, investment, infrastructure development and other arenas. China invited South Africa to join the group of BRIC nations in December, 2010 and hosted the third annual BRICs Summit in April, 2011.

Key Indicators and Statistics

Economic Growth and Development of the BRICs

From 2000 to 2008, the BRIC countries combined share of total world economic output rose from 16 to 22 percent. Together, the BRIC countries accounted for 30 percent of the increase in global output during the period. To date, the scale of Chinas economy and pace of its development has out-distanced those of its BRIC peers. China alone contributed more than half of the BRIC countries share and greater than 15 percent of the growth in world economic output from 2000 to 2008. The chart above on key development indicators for the BRIC countries shows the sharp contrast in GDP, merchandise exports and the UNDPs Human Development Index (HDI) between China and the other BRIC countries.

Growing BRIC Middle Class

The rapid economic growth and demographics of China and India are expected to give rise to a large middle class whose consumption would help drive the BRICs economic development and expansion of the global economy. The charts below depict how the increase in the middle class population of the BRIC countries is forecasted to more than double that of the developed G7 economies. (Click on the images below to view the fullsize charts in separate tabs or browser windows.)

Science and Technology in the BRICs

The BRIC countries of China, India and Brazil account for much of the dramatic increase in science research investments and scientific publications. Since 2002, global spending on science R&D has increased by 45 percent to more than $1,000 billion (one trillion) U.S. dollars. From 2002 to 2007, China, India and Brazil more than doubled their spending on science research, raising their collective share of global R&D spending from 17 to 24 percent. Chinas development planning has targeted a number of scientific fields and related industries, including clean energy, green transportation and rare earths, among others. Since 1999, Chinas spending on science R&D has grown 20 percent annually to more than $100 billion. By 2020, China plans to invest 2.5 percent of GDP in science research.

Next 11 Emerging Markets

Many analysts and commentators have suggested expanding the original group of four BRIC nations to include other emerging markets. Goldman Sachs has resisted conferring BRIC status on other developing countries on the grounds that their demographics and economic characteristics do not hold the potential for them to rival the economic size or influence of the BRIC countries or todays leading economies (e.g., U.S. and Japan). In a nod to the interest in other emerging markets, Goldman Sachs identified another group of economically dynamic and promising developing countries creatively labeled the Next 11 in its 2005 Economics Paper No. 134 How Solid are the BRICs? The Next 11 consists of a broader group of emerging markets with the potential to play significant roles in the global economy, including: Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam.

Saving vs. Spending in China, Brazil and Other Emerging Markets

In several respects, China and Brazil present two very different patterns of consumer behavior in BRIC countries and other emerging markets. Chinese demonstrate a strong inclination to delay current consumption in favor of saving for the future. Brazilians, on the other hand, put a higher priority on living for the present by devoting a considerably larger share of income to discretionary spending. On average, Chinese report saving 31 percent of income. Brazilians report saving a relatively modest 10 percent, the lowest level of the four BRIC countries. Differences in saving and spending behavior across the BRIC and other emerging market countries go deeper than average overall savings rates. In Brazil and Egypt, 52 percent and 72 percent of survey respondents, respectively, indicated they were not able to set aside any income for savings. By contrast, in India, which has a relatively low GDP per capita, only 2 percent of respondents reported not saving. China emerged as the only country where monthly savings amounts continue to rise with higher monthly household income levels, rather than leveling off as they appear to in Brazil, India and Russia. The Credit Suisse Report notes that Chinas steady savings propensity translates to much better relative growth prospects for the savings-related sector. The savings-related sector can include larger purchases of useful and discretionary goods and services, such as housing, education, transportation, durable household goods and vacations. It should be noted that Brazils relatively strong preference for spending versus saving is probably also partly a product of the very high, rapidly rising inflation rates that plagued economic growth and development in many Latin America countries in the past. This inflationary economic environment trained many Latin American consumers to spend their money as quickly as they earned it to avoid having inflation reduce its value to nearly nothing in a manner of months, days or even hours during the worst periods.

Consumer Spending in BRIC Countries and Other Emerging Markets

The Credit Suisse Consumption Map breaks consumer spending down into 3 categories of purchases: 1) Essential goods and services; 2) Useful goods and services; and 3) Discretionary goods and services. As analyzed by Credit Suisse, essential goods and services include food, household and communication items like meat and dairy products, bottled water and mobile phones. Useful goods and services encompass property, healthcare, education, computers and vehicles. Discretionary goods and services consist of brand name clothing, vacations and smart phones. The share of consumer spending devoted to discretionary and useful goods and services tends to increase as incomes rise and countries achieve higher levels of development.

Essential Goods and Services: Food Expenditures

Food items are fundamental staples of the essential goods and services consumption category. Its a bit difficult to reconcile the reports data on consumers food spending, though differences appear to at least partly be a function of timing and the impact of high economic growth rates. Credit Suisses own Emerging Consumer Survey data from 2011 put consumers food purchases in China and India at roughly 19 percent and 23 percent of total monthly spending, respectively. According to a compilation of somewhat older global data presented in the reports Figure 4, consumers in both China and India devoted more than 30 percent of household expenditures to food purchases as of 2008. Consumers in Brazil and Russia spend about 17 percent and 34 percent of income, respectively, on food according to Credit Suisse statistics. In Egypt, Indonesia and Saudi Arabia, food accounts for around 40 percent, 29 percent and 24 percent of monthly consumer spending, respectively. The available comparative data and inherent uncertainty about the reliability of consumer data from developing markets suggests that there could be considerable margin for error in these figures. It seems likely that the above data may understate the burden of high food expenditures for low income consumers in the event of discrepancies. Protein consumption is another interesting piece of data about consumers food spending in the BRIC countries and other emerging markets. Across all countries, protein consumption as a share of total diet increases rapidly at the lowest income levels and tends to level off fairly quickly. In the case of Brazil, China, Indonesia and Russia, protein consumption looks to remain relatively steady once average household income levels reach the equivalent of $2,000 to $3,000 per month at purchasing power parity (PPP).

As the share of household spending devoted to food purchases increases, food prices have greater impact on living standards, poverty rates, economic development and domestic politics. High food prices and expenditures have played a part in fostering civil unrest in Egypt and other Arab countries in recent weeks and raising concerns about a possible food crisis in developing countries as world food prices reached their highest levels on record in January, 2011.

Useful Goods and Services: Housing and Property Purchases

Despite the lingering issues with the world economy, consumer confidence across the BRIC countries and certain other emerging markets is strong in the wake and on-going expectation of high rates of economic growth, rising incomes and improving living standards. In China and Brazil, close to 20 percent of consumers earning the equivalent of $2,000 ($US, PPP) or less per month plan to purchase a property within the next two years. For Chinese consumers earning more than the $2,000 monthly threshold, the percentage of consumers expecting to buy property rises to 30 percent. In India, 18 percent of consumers who earn $1,000 to $2,000 ($US, PPP) per month plan to purchase property within two years. Indonesians have a fairly large appetite for property purchases even relative to consumers in their official BRIC counterparts. In the next two years, 24 percent, 36 percent and 56 percent of Indonesian consumers in the three respective income brackets plan to buy property. Rapid economic growth in China and other countries has had a tendency to quickly drive up real estate prices and raises concerns about the potential for property bubbles when prices reach the point that they are no longer supported by underlying economic fundamentals. In Chinas case, high personal savings rates provide at least some reassurance that inflated real estate prices are less likely to lead to the extent of financial damage they have in many developed countries in recent years.

Discretionary Goods and Services

The discretionary spending component of the Credit Suisse Consumption Map looks at consumers planned expenditures on brand name sports shoes and wear, foreign holidays and smart phones

Income Distribution and Economic Development

Income distribution is an important development characteristic that can have important implications for economic growth, living standards and domestic politics. As economies develop, more equal income distribution can help foster domestic demand and the shift in consumer spending from essential to useful and discretionary goods and services. The Credit Suisse report notes that the large share of households earning less than the equivalent of $1,000 (US$, PPP) per month in the BRIC and other selected countries skews consumer spending toward essential goods and services at current levels of economic development. The chart below reproduces the household income distribution data from the Credit Suisse research and includes the most recent available GINI Index values from the World Banks World Development Indicators (WDI) database. (Click on the image to view the full-size chart in a separate browser tab.)

Research Findings and Implications

The Credit Suisse Consumption Map and analysis of consumer spending attitudes and behaviors in the BRIC and other countries point to important patterns in the development of emerging markets as well as some interesting differences across countries and cultures. As economies develop, consumer spending in emerging markets moves from purchases of essential goods and services toward more intensive purchases of useful and discretionary goods and services. Brazilians live up to their reputation for enjoying life and living in the moment by being quicker to adopt discretionary spending habits that often resemble those of developed countries, though this behavior is also partly a product of past economic circumstances. Chinese tend to take a more conservative, long-term approach to consumer spending by maintaining much higher rates of savings than other BRIC and developing countries even as their income levels continue to rise.

Overall, the high degrees of consumer confidence and rapid economic development across the BRIC countries is an encouraging sign of their capacity to sustain and grow the global economy and contribute to rising living standards around the world It should be borne in mind that the BRICS are a highly heterogeneous group in terms of their political organization, their adherence to democratic values, and their domestic and foreign policy traditions. The role of China in this grouping is especially important. It exerts a disproportionally large influence on the BRICS agenda due to its enormous demographic, economic and political importance and potential. Thus, we run the risk of a certain decline of the model, if we could call that a model.

inShare2

The BRIC countries are made up of Brazil, Russia, India and China - although if we were to categorize them by importance, it would actually be CIRB. It just doesn't sound as sexy, does it?

And lets face it, sexiness sells, and that is why the masters of the universe at Goldman Sachs make the big bucks - for it was Goldmans who came up with the BRIC grouping, and it has stuck.

Why the BRIC are Important

The BRIC are both the fastest growing and largest emerging markets economies. They account for almost three billion people, or just under half of the total population of the world. In recent times, the BRIC have also contributed to the majority of world GDP growth. According to various economists projections, it is only a matter of time before China becomes the biggest economy in the world - sometime between 2030 and 2050 seems the consensus. In fact, Goldman Sachs believe that by 2050 these will be the most important economies, relegating the US to fifth place. By 2020, all of the BRIC should be in the top 10 largest economies of the world. The undisputed heavyweight, though, will be China, also the largest the creditor in the world. Apart from their growth characteristics, the BRIC countries frankly have little in common. They are primarily an investment category now, although there may some political and economic alliances that develop from that grouping. If they do, it is likely to be temporary - once China has assumed its rightful place, it may have no need for these alliances. A G2 of China and the US may be more important for it unless the 2050 predictions do come true. In 2008, the BRIC countries had a summit and analysts believed that they were seeking to 'convert their growing economic clout into political power'. These analysts believe that by working together, the BRIC countries can carve out the future economic order between themselves. They believe that China can dominate in manufactured goods, India in services, and Russia and Brazil in raw material supplies. By working together, they can effectively counter the entrenched interests and organisational structures of the west. In reality, right now, relations with the US, the EU and bilaterally are more important, but it is worth watching developments between BRIC nations to see if these notions start to become entrenched in active co-operation

Brazils economy is the largest in South America and the country boasts well developed agriculture, mining, manufacturing, and service sectors. Since 2003, Brazil has improved its macroeconomic stability, built foreign reserves, reduced debt, kept inflation rates under control and committed to fiscal responsibilities. After witnessing unprecedented economic growth in 2007 and 2008, the global financial crisis finally hit Brazil. Brazils currency and stock market saw huge fluctuations as foreign investments dwindled, demand for commodity exports dried up and external credit increased. However, Brazil was one of the first emerging markets to stage a recovery, with GDP growth returning to positive levels. The Central Bank predicts growth of 5% in 2010.

The development activities undertaken by the has made it one among the ten largest economies over the world. The more concerned inflationary pressure on the economic activities has come under control in the recent years. The services sector contributes a lot to country's economy followed by industrial sector. Major agricultural products in the country are coffee, soybeans, rice, sugarcane, and cocoa. Important industries are textiles, chemicals, iron ore, steel and motor vehicles. Exports sector in the country has also relative importance. Major exportable items of the country are iron ore, cocoa beans, maize, sisal and tobacco. The country has huge deposits of minerals, iron, phosphates, manganese, uranium, copper, coal platinum and gold.

Brazilian Economy: GDP and Labor

The following chart shows Brazils GDP (PPP) during 2007-2009. All figures are in US dollar trillion.

Brazils GDP- official exchange range, according to the 2009 estimates, was US$1.482 trillion. The next chart shows Brazils GDP-real growth rate during 2007-2009. All figures are in US dollar trillion.

The next charts show Brazils GDP-Per Capita and GDP- Sector Composition. All figures are in US dollar.

(All figures are in percentages in the above table)

Brazils total workforce, according to 2009 estimates, was 95.21 million. The rate of unemployment in 2009 was 7.4%, down from the 2008 estimates when the rate was 7.892%. The following chart shows Brazils labor force composition by occupation. All figures are in percentages.

Brazil is considered one of the four emerging markets in the world, along with Russia, India and China, since it's rapid growth and development of the economy in 2003.
Pegged by economic and political problems in the 1980s, Itamar Franco's government managed to stabilize its economy by introducing the "Plano Real", a set of economic measures that bring down the nation's high inflation rate. The inflation rate dropped and the real appreciated.

From 2003 onwards, the rise in demand of Brazil's commodities has increased the country's total exports, thus bringing overall economic growth. Brazil recorded a growth of 8.48 percent in GDP (PPP) in 2004, 6.02 percent growth in 2005 and 7.34 percent in 2006. The economy expanded further in 2007 with 9.21 percent increase in GDP (PPP), and 7.46 percent in 2008. The appreciation of its real and increase of export prices aid in reducing the nation's external debt, and increasing the budget for economic development. During the 2008 global financial crisis, Brazil's economic growth was under threat when the GDP (PPP) grow by just 0.27 percent. However, with huge international reserves, and the central bank to reduce interest rates, Brazil is one of the fastest country to get out the crisis,

Brazil is a member of numerous economic organizations, including Unasul, WTO, Mercosul, G-20 and the Cairns Group. Brazil has hundreds of trading partners, with 60 percent of its total exports made up of manufactured and semi manufactured goods. China is currently Brazil's largest export market, primarily in purchases of Brazil soy, iron ore and steel.

Economic Geography
Brazil has a total area of 8.5 million square km, and is the 5th largest country in the world in terms of area size. With only 6.9 percent of arable land, Brazil is the largest producer of agricultural products such as sugarcane, coffee, tropical fruits and frozen concentrated orange juice (FCOJ). Brazil is also a country rich in natural resources, including bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, hydropower and timber. Brazil is the 9th largest oil producer in the world, just behind United Arab Emirates, at 2.572 million barrels produced per day. A 2010 oil discovery off coast of Brazil by its state-run oil company, Petrobas boasted an estimate of 8 billion barrels of oil reserves.

Population and Labour Force

Brazil has a population of 203.4 million people, making it the 5th most populated country in the world. It has a labour force of 103.6 million people. The unemployment rate is 7 percent in 2010. Brazil is the largest Portuguese-speaking country in the world. With Brazil's economic progress in the past decade, one of the social problems the country face is poverty. Under the Lula administration, a social welfare program, Bolsa Famila, was introduced in 2003 to provide financial aid to 12 million poor Brazilian families. It is regarded as

the largest social welfare program in the world, and has according the the Central Bank of Brazil, from 2003 to 2009, this program has helped 20.5 million people get out of poverty.

Industry Sectors
Agriculture in Brazil is well diversified, and the country is the largest producer of sugarcane, coffee, tropical fruits, frozen concentrated orange juice (FCOJ). Brazil's agriculture is also important for the production of soybeans, corn, cotton, cocoa, tobacco and forest products. Agriculture contributes to 6.1 percent of the country's total GDP in 2010, and employs 20 percent of its total labour force.

Brazil has the largest cattle herd in the world, with 207.5 millions of cattle in 2009, over 50 percent larger than that of the US. The increase in production of the country's livestock and crops leads to the rise of deforestation and land clearing in the country. These activities results in producing 75 percent of Brazil's total emissions of greenhouse gases, and make the country one of the top world greenhouse gas(GHG) emitters.
Brazil also has a diverse and well-developed industry, regarded as one of the most advanced industry in Latin America. It covers the automobile and parts, machinery and equipment, textiles, cement, computers, aircrafts, steel and petrochemicals, and consumer durables. The industry contributes 26.4 percent of the nation's total GDP, and employs 14 percent of its total labour force. Brazil is also one of the world's leading producers of hydroelectric power, and hydropower accounts for 69 percent of the country's total electricity generation. Nuclear energy contributes to 4 percent of Brazil's electricity. The country currently has 2 nuclear power plant, Angra I and Angra II. Plans and work is on the way for the third plant, Angra III. Brazil has an expanding services industry and it contributes about 67.5 percent of the nation's total GDP, and employs about 66 percent of the total labour force. Brazil has a welldeveloped services sector, with major industries including telecommunications, banking, energy, commerce and computing sectors. Brazil's banking industry is financially strong and attracted huge inflow of foreign investment, with a strong national currency, and boast one of the highest interest rate in the world. Two of the largest banks in Brazil are government owned, but US and other foreign banks do have an a significant share of the financial market