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South Africa is the smallest Brics country. Sluggish growth is a striking and enduring feature of the economy, affecting the capacity to create jobs and reverse the extremely high unemployment rate of 24.9%. The International Monetary Fund forecasts a growth rate of 3.6% for this year. However, based on recent lacklustre economic performance, domestic estimates are lower and hover at 2.5%. Weaknesses in the global economy, and domestic structural constraints and policy limitations, are blamed for South Africa’s perennial inability to break through the 6% growth mark. The largest problems remain slow growth, high unemployment, infrastructure backlogs, public capacity to implement policy changes and ingrained structural weaknesses
Russia has come a long way since the days of the communist Soviet Union. In 2011, it became the world’s leading oil producer and overtook Middle Eastern petrogiants like Saudi Arabia. It experienced severe declines in economic performance in the early to mid-2000s. But in 2008/09, the economy began to pick up. It has reduced its budget deficit, unemployment has plunged to record lows and inflation has been progressively lowered. But it still needs to deal with corruption, oil dependence and an underinvestment in infrastructure. After joining the World Trade Organisation, a deeper integration into the world economy is expected
India has become the world’s 10th-largest economy over a decade and a half. But its economic ambitions were thwarted last year by the underperformance of the complex mixed economy. Economic growth began loosing steam in 2011. This trend continued throughout 2012. The weakening trend was triggered initially by tight monetary policies intended to address persistent inflation and a decline in investments due to loss of confidence in the economic climate. The burden of investor pessimism borne by India is not only due to lack of confidence in domestic economic reforms, but also to the global financial crisis
While China is the secondlargest economy in the world, it remains a developing country in terms of per capita income. China, with per capita income languishing at $4 940, is ranked 114 in the world. With 170 million people still living below the $1.25 a day international poverty line, China has the second-largest number of poor people in the world after India. Poverty reduction remains a challenge. Double-digit growth has been a feature of the economy and the country eclipsed Japan as the world’s second-largest economy in 2001. But China needs to fight inflation and entrenched, and find an appropriate level at which to peg the internationalised renminbi
After a lacklustre economic performance, Brazil is showing signs of recovery due to a slew of expansionary measures taken by the government to stimulate the economy. A recent 1.4% expansion in GDP has been recorded. The economy underperformed notably last year. In the last quarter of 2012, retail sales and industrial production buoyed the economy, and a solid 2.5% upward movement in industrial output was registered. Even though inflation inched up in the last quarter of 2012, evidence of improvement abounds. Concerns about the wide income and wealth gaps continue, as do niggles about the growing trade deficit
President: Jacob Zuma Gross domestic product CPI inflation rate Current account to GDP Unemployment rate 2.10% 5.90% 6.30% 24.9%
President: Vladimir Putin Gross domestic product CPI inflation rate Current account to GDP Unemployment rate 5.6% 7.30% 5.50% 5.80%
Prime Minister: Manmohan Singh Gross domestic product CPI inflation rate Current account to GDP Unemployment rate 5.3% 7.18% 4.1% 9.4%
President: Xi Jinping Gross domestic product CPI inflation rate Current account to GDP Unemployment rate 7.9% 3.8% 4.0% 4.10 %
President: Dilma Rousseff Gross domestic product CPI inflation rate Current account to GDP Unemployment rate 7.5% 5.40% 2.40% 5.6%
Population: 48 million
Population: 143 million
Population: 1.2 billion
Population: 1.3 billion
Population: 193 million
BRICS STATISTICS 20%
In 2011, Brics’ share of GDP based on PPP amounted to about 20% (estimated $13.7 trillion) In PPP terms, it is about 30% of the world’s GDP at the moment. By 2020, it will be 37% to 38% and reaching 45% by about 2030 Brics’ share of global output will increase from 18% (according to market exchange rates), to 25% to 26% over the next 10 years and even to 40% one-third by 2030 20%
Some analysts predict that Brics could become as big as the Group of seven (US, Japan, Germany, France, Britain, Canada and Italy) by 2027
Brics countries have increased their share of global GDP threefold in the past 15 years Brics’ combined foreign reserves are estimated at $4 trillion
Brics countries occupy 30% of the global territory
They are home to 45% of the world’s population The contribution to global economic growth over the past decade has reached 50%, which makes this group of states the leading power in global economic development Brics countries account for 17% of world trade
Brics accounted for approximately 11% of global annual foreign direct investment (FDI) flows in 2012 ($465 billion)
South Africa has a population of more than 50 million and an economy worth approximately $527 billion. Its per capita income level at PPP compares favourably with Brics partners, estimated at $11 000
KEY MESSAGES The opportunities SUPPORTING STATEMENTS
Q South Africa aims to play a larger role in world affairs Q South Africa aimes to participate in a way that is beneficial to the African continent, while increasing volumes of trade with the leading emerging market economies represented in Brics Q As South Africa is now the chair of the Brics group of countries, she is pursuing an agenda of increasing her global stature and influence, and changes to the governance structures of the international monetary system Q These economies are characterised by impressive growth levels and will be important parts of the unfolding global economic dispensation of the future Q Another key feature of emerging economies is youthful growing populations - while this may bring the risk of political and social instability, it also brings the potential for strong long-term growth rates. This stands in opposition to Japan, the US and Europe, which face a squeeze on retirement funds due to large ageing populations Q The next feature is that most are transitional economies in the process of moving from transitional closed economies to more open systems Q Human capital flight is another feature of Brics emerging economies that lose money spent on human capital development to more developed economies. Brics countries are considering mechanisms to stem the tide of human capital flight Q Many emerging markets are experiencing increased levels of foreign direct investment Q Their collective economic strength and pooled resevoirs of funding can be used to finance initiatives in developing countries, thus providing an alternative source of development finance to the World Bank and the international Monetary Fund Q Brics seeks to advance the restructuring of the global political economic and financial architecture into one less dominated by the post-World War 2 victors Q The Brics countries have agreed to cooperate on infrastructure, mining, manufacturing, trade, green economy initiatives and human development programmes Q Brics countries will group calls for further international financial regulatory oversight and reform, strengthening policy coordination, and financial regulation and supervision Q Brics countries plan to collectively embark on global financial market and banking system reform initiatives Q A Brics Bank to fund development and facilitate trade between the block of countries Q A Brics trainning facility for the development of human capital Q A Brics Business Council Q A forum for military and security cooperation
Key features of emerging economies
What Brics countries are planning to do together
New Brics institutional infrastructure
Rudi Louw, Graphics24
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