The BRICs markets – Brazil, Russia, India and China – have survived the global economic crisis quite well, emerging even stronger than before. These counties have large surpluses in international trade as well as reserves in foreign currency, which really helped in the last downturn. They are on pace to equal the G7 in size by 2032, seven years earlier than originally predicted.
Since Jim O’Neill, global economist at Goldman Sachs, coined the term in 2001, the BRIC countries have really taken off. Over the past 10 years they have contributed over a third of world GDP growth and grown from one-sixth of the world economy to almost a quarter (in PPP terms). Jim O'Neill expects this trend to continue and to be even more pronounced in the coming decades.
In the coming decade, the story to watch will be the rise of the new BRICs middle class. In the last decade alone, the number of people with incomes greater than $6,000 and less than $30,000 has grown by hundreds of millions,and this number is set to rise even further in the next 10 years. These trends will inevitably bring about an increased change in demand that will affect the types of products the BRICs import. The percentage of low value added goods imported is likely to fall and imports of high value added goods, such as cars, office equipment and technology, will rise. As China and India are the world’s two most populous countries, rising incomes there will have much greater impact on global demand than any other countries could.
Last month the four countries met in Brazil's capital Brasilia to discuss future plans about the global economy, cooperation, trade and political association. While these countries have many differences and barriers to cross, it will be interesting to see how well they can work together and change the face of international business.