History, present and future of BRIC countries

History, present and future of BRIC countriesINTRODUCTIONOur topic for research is BRIC issues, so firstly we must know what is BRIC. BRIC is a related acronym that refers to the economies of brazil-nut tree, Russia, India and China.This idea was incorporated by brazil nutian president Luis Inacio Lula da Silva in June 2007. The basic reason for these quadruple countries to come together was their general dissatisfaction the prevailing ball-shaped scotch and political order largely dominated by the US and her western allies. They entertain not been given the importance that these countries should pass water got in relation to their size and share in the providence. Its only the G-8 countries that decide for the future rules of global adult male order. So this was the reason for formation of the BRIC countries. The BRIC countries are withal referred to as the big four as all of them are deemed to be at similar stage of economic development. The acronym was coined by Jim ONei ll in a 2001 paper entitled The humans Needs Better Economic BRICs.The following is the position of BRIC nations in relation to the institutionCountries carry on of beingnessnominal GDP (%)Share of worldmilitary spending (%)Share of worldpopulation (%)Share of worldlandmass (%)Average share (%)http//upload.wikimedia.org/wikipedia/commons/ click/0/05/Flag_of_Brazil.svg/22px-Flag_of_Brazil.svg.pngBrazil3.31.72.85.63.4http//upload.wikimedia.org/wikipedia/commons/ interchange/f/fa/Flag_of_the_People%27s_Republic_of_China.svg/22px-Flag_of_the_People%27s_Republic_of_China.svg.pngChina9.36.619.56.210.4http//upload.wikimedia.org/wikipedia/commons/thumb/4/41/Flag_of_India.svg/22px-Flag_of_India.svg.pngIndia2.32.417.31.96.0http//upload.wikimedia.org/wikipedia/commons/thumb/f/f3/Flag_of_Russia.svg/22px-Flag_of_Russia.svg.pngRussia2.43.52.110.94.7According to Goldman Sachs, by 2050 the combined economies of the BRIC countries would dominate the combined economies of the current richest cou ntries in the world. The BRIC countries combined currently account for more than quarter of worlds land and more than 40% of worlds population. The economic potential of Brazil, Russia, India and China is such(prenominal) that they can become the top four dominant countries of the world by the year 2050.The following leaders were present at the summithttp//upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Lula_-_foto_oficial05012007_edit.jpg/80px-Lula_-_foto_oficial05012007_edit.jpgBrazilBrazilLuiz Incio Lula da Silva, Presidenthttp//upload.wikimedia.org/wikipedia/commons/thumb/e/e9/Dmitry_Medvedev_ formal_large_photo_-5.jpg/86px-Dmitry_Medvedev_official_large_photo_-5.jpgRussiaRussiaDmitry Medvedev, Presidenthttp//upload.wikimedia.org/wikipedia/commons/thumb/f/f3/Manmohansingh04052007.jpg/78px-Manmohansingh04052007.jpgIndiaIndiaManmohan Singh, Prime Ministerhttp//upload.wikimedia.org/wikipedia/commons/thumb/c/c4/Hu_Jintao_%28Cropped%29.png/107px-Hu_Jintao_%28Cropped%29.pngPeoples R epublic of ChinaChinaHu Jintao, PresidentBRIC countries hold a combined GDP (PPP) of 15.435 trillion dollars. On almost every scale, they would be the largest entity on the global stage. These four countries are among the biggest and fastest festering emerging markets. In a paper Dreaming with BRICS The Path to 2050, published in 2003, the following was estimatedChinas economy volition authorise the economy of Germany in the next few years, of Japan by 2015, and of the coupled States of America by 2041.The growth rate of India will be the highest and it will deluge Japan by 2032.BRICs currencies can appreciate by 300% over the next 50 years.Taken together, the BRIC countries can be larger than United States and the demonstrable economies within 40 years.By the year 2025. The BRIC countries will bring about 200 million people with incomes above $15000 in the worlds economy. It is equal to the combined populations of Germany, France and United Kingdom.But according to the report s the economy of china overtook the economy of Germany in the year 2007 instead of the prediction of 2008 and Japan in the July 2010.ISSUES RELATING TO BRIC COUNTIESThe first official BRIC summit was held on 16 June 2009, in Yekaterinburg, Russia. Luiz Incio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India and China, all attended this summit.The main focus of this summit was to improve the current global economic situation and discussing how these four countries could work together in the future for the development of the world economy. They also discussed how these countries could be better involved in global personal matters in the future. They also suggested that there was a desire for a new global reserve currency that is diversified, stable and predictable. This statement was a kind of an barrage on the dominance of the US dollar.The foreign ministers of all these countries had earlier also met on May 16, 2008 in Yakaterinburg. One week before their first official summit, Brazil had offered $10 billion dollars to the International M unmatchabletary Fund (IMF) which was the first time that the country had ever made such a loan. This loan showed how the economy of Brazil is growing and that it is in a good state now.China has also planned to invest a total of $50.1 billion and Russia planned to invest $10 billion.The following the major issues discussed by BRICCoping with the current worldwide financial crisisDiscussions were held on issues such as the worlds reserve currency and some countries will try and adopt local currencies as settlement currency for bilateral trade so that they can overcome the impact of international financial crisis and assuage trade contacts with other countries. The BRIC countries discussed ways to overcome the financial crisis that many parts of the world were facing as a result of the crisis that started in U.S.Coping with global climate changeAnother important BRIC issue is to cope with global climate change. This is a very important issue because we need to ensure that the world becomes a better planet to live in. The concept of sustainable development was stressed in solving this problem. Sustainable development means that the resources should be employ efficiently and effectively such that it is not only useful to the present generations but also available for the future generations.They also discussed that environmental issues should not be made an excuse to restrain the economic and social development of emerging economies. Environmental abjection should not hinder economic growth.The colloquium on Climate deviate Law and Governance in South Asia, aims to inspire legal discussion within and between the BRICs countries. It is being jointly organized by the Environment Ministry of presidential term of India and the Geneva-based International Union for the Conservation of Nature (IUCN).Development of second and third generation ren ewable energiesThe development of second and third generation renewable energies is a subject of common interest for all the countries. They also hope that more and more countries of the world will participate in the development and utilization of renewable sources of energy so as to facilitate economic development.World peace and securityWorld peace and security is a universal issue concerning the gentleman race. Without peace and security economic growth and development cannot happen. The emerging markets should play a greater role among international multilateral institutions to improve the efficiency, vitality of international multilateral mechanism. Such countries can play a positive role to preserve the sovereignty of all countries as well as maintain world peace.BRIC cooperation will enhance the piece of developing nationsBRIC countries share common interests and concerns in international affairs and should consolidate cooperation.It is necessary for the BRIC countries to s trengthen dialogue, coordination and cooperation to enhance the overall voice and influence of emerging markets and developing countries, and promote world peace, stability and universal development.BRIC countries demand more say in financial system reformThe BRIC countries have welcomed the expansion of the Balse committee that standard accounting bodies need to be set up. The BRIC ministers agreed that stabilization of international financial system through liquidity champion and recapitalization is a priority. They are also taking measures to promote domestic demand in their national economies.The BRIC countries to play roles as new donors to AfricaAfrica has plenty to gain from the growing involvement of China and other BRIC nations in trade and investment on the continentNeed for changes in global institutions, including the International Monetary Fund (IMF) and the World BankThe BRIC countries have realized the need for change in global institutions including the Internationa l Monetary Fund and the World Bank. There is also a need to update regulation of financial markets to avoid another global crisis. On matters relating to the IMF, the countries have agreed to aim at achieving a significant 7% transfer in Quota shares in favour of EMDCs and New arrangement to borrow.For the World Bank, the nations discussed ways and means of enhancing the voice participation of developing countries and agreed to aim for a liberation of a 6% of parity.They also supported an increase in capital for both the World Bank and its private lending arm, the International Finance potbelly stove (IFC).Challenges in setting conditions for sustained growthBrazil is the only nation where the growth rates have been less than expected. This is because Brazil is practically less exculpated to trade and it has lower investment and savings. The public and foreign debt is also very high. Unless these obstacles are removed, Brazil is unlikely to achieve the targets set for it.Enviro nmental constraintsEnvironmental degradation is a critical risk to the economic rise of the BRIC nations. Global warming can have a bad impact on the rural incomes. excessively urbanization and industrialization puts a mint candy of pressure on the environment.Many major cities like Shanghai, Mumbai, Rio de Janeiro are vulnerable to rising sea levels.Resources issueRussia and Brazil are resource rich nations but china and India have to depend a lot upon imports to fuel their growth. If commodity prices rise, it will have a lot of effect on their imports and hence their growth.If technology advances and reduces dependence on conventional energy sources, Russia and Brazil will face reduced prospects for growth.DemographicsThe population of India is increasing at a very high rate while the population of Russia is at decline. Brazil and China have declining populations (in case of China due to one family one child policy). Population decline could be a significant constraint for Russ ia and China, though China could avoid this by relaxing the rules a bit.Structural constraints solely the BRIC countries have structural issues which need to be addressed. India needs significant economic reforms. Brazil saves and invests too little. Each country should invest at least that much to ensure that it has infrastructure to maintain growth.IranBrazil has expressed affinity with China towards the Iranian nuclear issue.DevelopmentChina has showed willingness to be a positive married person in global development saying The scale and complexity of the challenges that we face in the course of development are unmatched anywhere else in the world and have been rarely seen in human history. China is willing to be dedicated to peace and cooperation and is willing to make greater contribution to mankind.The above were most of the major BRIC issues which we have tried to explain through our research.