Meet the Brics Case

Global Business Environment

BUAD 811

Spring 2012

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Meet the BRICs

Increasing attention showcases the accelerating success of emerging economies. The focus of attention is now squarely on the vanguard of emerging economies, the so-called BRICs: Brazil, Russia, India, and China. Together, they are home to nearly 2.8 billion people (40 percent of the world), cover a quarter of the area of the world on three continents, and generate more than 25 percent of global GDP. The BRICs, although much larger in scale and scope than other emerging markets, represent trends that are gaining momentum throughout the world. Many presume that where the BRICs go, both good and bad, others will follow. As we profile their emergence, we discuss the implications for the global economic environment and then close by identifying threats.

Changing of the Guard

First off, it’s critical to remind oneself where the BRIC countries were just 30 or so years ago. Brazil was an economic basket case suffering hyperinflation, Russia was in lockdown behind the Iron Curtain, India's rising socialism had led it to kick out IBM and Coca-Cola, and China was recovering from the bedlam of the Cultural Revolution and struggling with the consequences of Mao Zedong. Today, conditions and circumstances have radically changed. At current trends and with reasonable projections, over the next few decades Brazil, Russia, India, and China will become premier, powerful players (See Figure 4.9).

Originally, some thought it would take until 2050 or so before the BRICs bypassed today’s rich countries. The global financial crisis, however, fast-forwards the schedule; whereas the BRICs are growing, Germany, Japan, England, Italy, France, and the United States, among others in the West, are struggling mightily. Unquestionably, growth will resume for the latter set. Still, their aging workforces, overwhelming debt, and slowing productivity suggest it will fall short of that...