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Brics & its future prospects
The document discusses the BRICS group, which includes Brazil, Russia, India, China and South Africa. Some key points: - BRICS represents around 3 billion people and has a combined GDP of $18.5 trillion, accounting for around 18% of the world economy. - The group aims to promote technology sharing, education, regional development and removal of trade barriers for economic growth. - Each BRICS country is seen as an emerging economy, with China being the largest in terms of GDP and India having the second largest labor force. - Trade between the BRICS countries has been growing. There are also developments like the BRICS bank to provide infrastructure funding. - The future prospects of BRICS include
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Brics & its future prospects
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- 2. • Acronym foran 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.
- 3. Key Statistics 3 Billion people Combined GDPof 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
- 4. Need/ Importance ofBRICS • 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
- 5. razil 10th fastest growingeconomies 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
- 6. USSIA Russia has capabilityin 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
- 7. NDIA 1.2 billion people 2ndlargest labour force Holds second place followed by China in BRICS Democratic country Broad knowledge economy.
- 8. HINA 18Th fastest growingeconomy 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
- 9. outh Africa The SouthAfrican 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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- 12. Trade between Brazil,Russia & Rest of BRICS
- 13. Trade between India,China & Rest of BRICS
- 14. Trade between SouthAfrica & Rest of BRICS • Source based on UN COMTRADE and http://wits.worldbank.org/wits/
- 15. 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
- 16. Brazil • Development ofnew 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.
- 17. Brazil, 93.50% Russia, 99.60% India, 74.04% China, 95.10% South Africa, 93% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% BrazilRussia India China South Africa Literacy rate (2013) 0.744 0.778 0.586 0.719 0.658 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Brazil Russia India China South Africa HDI(2013) 0 10 20 30 40 50 60 70 BRAZIL RUSSIA INDIA CHINA SOUTH AFRICA Percent(%) Trade(as % GDP) 2010 2011 2012 2013 Linear (2010) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 BRAZIL RUSSIA INDIA CHINA SOUTH AFRICA$(inmillion) Exports 2010 2011 2012 2013
- 18. 0 500,000 1,000,000 1,500,000 2,000,000 Brazil Russia IndiaChina South Africa $(inmillion) Imports 2010 2011 2012 2013 13773 20541 4549 9053 11426 15034 24120 5410 11904 12504 0 5000 10000 15000 20000 25000 30000 Brazil Russia India China South Africa $ GDP per capita 2013 2010 2.5 2.8 1.6 4.6 1.0 3.6 3.8 0.0 3.8 2.3 BRAZIL RUSSIA INDIA CHINA SOUTH AFRICA Percent(%) Foreign direct investment, net inflows (% of GDP) 2010 2013
- 21. Comparison of developed (G7) countrieswith the emerging (BRICS) nations.
- 22. GDP 2014 inbillion dollars 1,825 2,737 3,636 2,072 4,902 2,536 16,800 2,243 2,118 1,871 9,181 351 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
- 23. GDP rate ofchange YOY
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- 26. FDI flows 2011-2014(no of times)
- 27. Foreign exchange reserves 1,296 239172 173 95 148 66 3,213 499 352 299 49 0 500 1,000 1,500 2,000 2,500 3,000 3,500 $inbillions 1,283 208 157 154 143 144 75 4,009 478 376 319 48 0 1,000 2,000 3,000 4,000 5,000 2011 2014
- 28. Growth rate ofnew 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.
- 29. Future Prospects Sustainable solutionfor 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
- 30. Working Population acrossthe World
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- 34. GDP & Percapita Income
- 35. Development of BRICSbank Reducing the rural/urban income gap Maintaining macroeconomic stability Inadequate Financial reforms Managing Supply Chain
- 36. Dependenc y onoil 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
- 37. Conclusion It is possiblethat 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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