brics & its future prospects
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Its a group presentation prepared by me. in MET college. PGDM MarketingTRANSCRIPT
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Its Future Prospects
Presented by: -
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• Acronym for an association of five emerging economies:
Brazil, Russia, India, China, and South Africa.
• Term coined by , Jim O’Neill , a global economist in
Goldman Sachs in 2001
• First Summit : Yekaterinburg, Russia on June 16, 2009.
• Entry of South Africa in 2010.
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Key Statistics
3 Billion people
Combined GDP of
US$18.486 trillions
Combined reserves of US$ 4 trillion
Represents 18% of world economy
Accounts for just over $13.5-trillion of the world's total output
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Need/ Importance of BRICS
• Promote the technological information exchange
• Improve the professional development and education of countries.
• Making these countries getting closer to others to obtain the
comparative advantages of these countries.
• To achieve regional development
• To remove trade barriers
• Economic development
• Optimum use of resources
• Building relationship
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razil
10th fastest growing economies in the last centuries
Extremely rich in resources such as coffee, sugarcane, crude oil and iron etc.
Focus on equitable development has resulted in significant poverty reduction.
Textiles, chemicals , iron ore , steel and motor vehicles industries.
31% of people in middle income group.
Brazil today is the most popular of the BRICs so far as foreign direct investment is concerned
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USSIA
Russia has capability in high-technology sectors
Accounts for around 20% of the world’s oil and gas reserves
Fall in the number of people living below the poverty line
Consumer market of over 140 million people
68% of people comes under middle income group
Highly educated workforce
Third largest exporter of steel and aluminium
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NDIA
1.2 billion people
2nd largest labour force
Holds second place followed by China in BRICS
Democratic country
Broad knowledge economy.
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HINA
18Th fastest growing economy
Third largest country in land size
Biggest of all BRIC nations GDP wise
13% of people comes under middle income group
Holds more than $3 trillion forex reserves.
Largest exporter/ importer for 32 and 34 countries respectively.
Cheap labour work force
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outh Africa
The South African economy is now the 23rd largest in the world
Inflation is below 6.6% and falling.
25% of goods produced in South Africa are for export
Richest in terms of its mineral reserves.
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TO
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Trade between Brazil, Russia & Rest of BRICS
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Trade between India, China & Rest of BRICS
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Trade between South Africa & Rest of BRICS
• Source based on UN COMTRADE and http://wits.worldbank.org/wits/
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BRICS - Developments
Russia
• Treasury bonds – known as OFZs
• Large sporting events.
China
• Recent reforms by the China securities and regulatory Commission (CSRC) has sought to bolster investor confidence.
• Financial help to SME’s
• 600 million citizen have been lifted out of poverty in China.
• China’s state owned enterprise produced over 50% of its goods and services and employed over half of the nation labour force.
South Africa
• Invested Rs.300bn in expanding Its Railway, Ports and fuel pipelines.
• 10% of the world’s oil reserves, 40 % of gold ore and 95% of platinum
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Brazil
• Development of new oil fields and refineries in order to increase production capacity in Brazil.
• Improved efficiency of agricultural output
India
• Access to affordable drugs to global countries.
BRICS
• Signing Bilateral accords on air defense, gas and education among nation members
• 21% of world’s GDP,
• 20% Global Trade,
• 11% accumulated investments.
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Brazil Russia India China South Africa
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00% Brazil; 93.50%
Russia; 99.60%
India; 74.04%
China; 95.10%
South Africa; 93.00%
Literacy rate (2013)
Brazil Russia India China South Africa
00.10.20.30.40.50.60.70.80.9
0.744 0.778
0.586
0.7190.658
HDI(2013)
Brazil Russia India China South Africa
010203040506070
Trade(as % GDP)2010 Linear (2010) 20112012 2013
Perc
en
t (%
)
Brazil Russia India China South Africa
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Exports
2010 2011 2012 2013
$ (
in m
illi
on
)
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Brazil Russia India China South Africa
0
400,000
800,000
1,200,000
1,600,000
2,000,000
Imports
2010 2011 2012 2013
$ (
in m
illi
on
)
Brazil
India
South Africa
0 5000 10000 15000 20000 25000 3000013773
20541
4549
9053
11426
15034
24120
5410
11904
12504
GDP per capita
2013 2010
$
Brazil Russia India China South Africa
2.52.8
1.6
4.6
1.0
3.6 3.8
0.0
3.8
2.3
Foreign direct investment, net inflows (% of GDP)
2010 2013
Perc
en
t (%
)
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Comparison of developed (G7)
countries with the emerging (BRICS)
nations.
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GDP 2014 in billion dollars
Can
ada
Fra
nce
Ger
man
y
Ital
y
Japa
n
Uni
ted
Kingd
om
Uni
ted
State
s
Bra
zil
Rus
sia
Indi
a
Chi
na
Sou
th A
fric
a0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
1,8252,737
3,6362,072
4,902
2,536
16,800
2,243 2,118 1,871
9,181
351
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GDP rate of change YOY
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Population
Can
ada
Fra
nce
Ger
man
y It
aly
Japa
n
Uni
ted
Kingd
om
Uni
ted
Stat
es
Eur
opea
n Uni
on
Bra
zil
Rus
sia
Indi
a
Chi
na
Sou
th A
frica
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
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Foreign Direct Investment flows
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FDI flows 2011-2014 (no of times)
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Foreign exchange reserves
0
1,000
2,000
3,000
1296
239 172 173 95 148 66
3213
499 352 299 49$
in
bil
lion
s
01,5003,0004,500
1,283208 157 154 143 144 75
4,009
478 376 319 48
2011
2014
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Growth rate of new business formation
• Gap between the G7 nations and BRICS economies narrowed in 2013, according to research.
• BRICS had a rate of over seven times greater than the G7 countries from 2007-2011, posting a 5.8 percent Combined Annual Growth Rate (CAGR) versus a 0.8 percent increase by the G7.
• In 2012 the BRICS rate was 4.9 percent, generating 1.2 million new businesses & G7’s was 1.9 percent, adding 531,000 companies.
• China grew at 9.1 %.
• Brazil grew by 3.4 %.
• France exhibited the fastest rate of 16.7 %.
• Italy declined by 0.3 % and Canada dropped by 13.6 %.
• The report indicates that well targeted government interventions can boost the survival rates of startup companies that require time and capital to translate their competitive assets into sustainable growth.
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Future ProspectsSustainable solution for inclusive growth
• Broadening multi-dimensional co-operation
• Mutual Trade and Investment
New Development Bank (BRICS Bank)
• Lending for Infrastructure projects
• Aid to other small economies
Contingent Reserve Arrangement
Export Credit & Guarantee Agencies
Significant Role in International Affairs
Trade in local currency
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Working Population across the World
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Rising Middle Class
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Infrastructure Investments
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Growth and Demand
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GDP & Per capita Income
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BRICS – ChallengesDevelopment of BRICS bank
Reducing the rural/urban income gap
Maintaining macroeconomic stability
Inadequate Financial reforms
Managing Supply Chain
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Dependency on oil
Corruption
Industrial output is weak
Inefficient Judicial System
Illiteracy
Lack of Infrastructure
High Inflation
Economic disparity
48% population below poverty line
Lack of skill sets, particularly in IT
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Conclusion It is possible that China could become as big as the US by 2027
India and Russia will individually be larger than Spain, Canada or Italy by 2020
By 2025 BRICS will be over half the size of the G7
Long-term projections BRICs could account for almost 50% of global equity markets by 2050
Of the current G7, only the US and Japan may be among the seven largest economies in US
dollar terms in 2050
By 2050, the largest economies in the world (by GDP) may no longer be the richest (by income
per capita)
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Thank You