or a formal trading association. Russia. like European Union.BRICs 2050  BRIC or BRICs are terms used in economies to refer to the combination of Brazil. India and China. but they have the potential to form a powerful economic bloc. .  There countries are not a political alliance.

IT& ITES ‡China ± Cheap abundant labour ‡Current account surplus and large forex reserves ‡Declining central government¶s consumption expenditures ‡Positive change in business environment . oil ‡Declining reliance on Aid ‡Low Fiscal deficits Unique advantage ‡India ± Technology.‡Fastest growing economies ‡Biggest source of labour ‡Rising consumption expenditures ‡Size of the economies ‡Diversity Demographic factors ‡Rising middle class ‡Low market penetration ‡Trade dependency ‡Rising f ocus on innovation Income & demographic Changes Growth factors Economic Growth Currency Rise of BRICs Movements Structural factors Global demand patterns ‡Mature markets ‡Brazil ± Commodities and natural resources ‡Russia ± Technology.

Infrastructure.6%.  The size of Brazil s economy overtakes Italy by 2025. higher public and foreign debt.  Critical issues: Foreign and public debt constraints. France by 2031. UK and Germany by 2036.  Lower convergence rate at first.  Challenges: lack of openness.BRICs Brazil  Over the next 50 years. Openness to trade . Brazil s GDP growth rate averages 3. lower savings and investment. lower education levels. then catch-up with China.

 Demographic dynamics drive GDP per capita path. Russia s GDP per capita is by far the highest of the BRICs. France in 2024.BRICs Russia  By 2050. . The Transition from Oil. UK in 2027 and Germany in 2028.  Critical issues: Life after Putin.  Russia s economy overtakes Italy in 2018.

. Basic Education.BRICs India  India s growth rate remains above 5% throughout the period.  Critical issues: Openness.  India could raise its income per capita in 2050 to 35 times current levels. India s income per capita will be significantly lower than any of the countries we look at.  India s GDP outstrips that of Japan by 2032. Policy Coherence.  Still.

 High investment rates. growth slows to around 3.  Even so. China becomes the world s largest economy by 2041.5%.000 per capita).  By the mid-2040s. Political Transition. tapers off though projection period. .1% growth rate projected for 2003.  Critical issues: Financial System Reform.BRICs China  China s GDP growth rate falls to 5% in 2020 from its 8.  China s per capita income could be roughly what the developed economies are now (about US$30.


. ‡ The first and foremost impact is going to be on environment.).‡ The Rise of BRICs would embark upon a shift in global production networks which would lead major changes in demand supply (for example the rise of East Asian tigers) much of which is already on happening. a global common. Much of this change would rest upon what BRICs countries choose to do in near future (for example emission cuts. ‡ Sustained strong growth in BRICs economies might have similar impacts on their major trading partners. ‡ A shift in Global governance would the other major impact of the rise in BRICs. The rise of BRICs would be a driving force towards demand pricing range of commodities which would open up new opportunities for transnational corporations. clean fuel technology. etc.


2003). ‡ About 1/3 of the increase in forex reserves would come from rising currencies. with the other 2/3 from faster growth. ‡ The pattern of capital flows might move further in their favor and major currency realignments would take place (Goldman Sachs.‡ Higher growth may lead to higher returns and increased demand for capital in these markets²and for the means to finance it. . ‡ Rising exchange rates could contribute a significant amount to the rise in forex reserves in the BRICs which would further reduce demand side constraints in balance of payments.

8% per annum.  ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Ten key areas where reform is neededImprove governance Raise educational achievement Increase quality & quantity of universities Control inflation Introduce a credible fiscal policy Liberalize financial market Increase trade with nightbours Increase agricultural productivity Improve infrastructure Improve environmental quality . and is currently ranked 110 out of a set of 181 countries. India scores below the other three BRIC nations.  If India were able to undertake the necessary reforms. it could raise its growth potential by as much as 2.

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