Brazil, Russia, India and China concluded their first official summit on Tuesday. Nothing unexpected has come out of the meeting. Their demand for a greater role in the World Economic affairs and United Nations was emphasized again. Though other customary support and implementation issues were deliberated, I would like to place my strong view on these countries PUSH-FOR-A-SAY.
These four countries together are popularly called as BRIC, a phrase coined by the US Investment firms (I think it was Goldman Sachs or Morgan Stanley) around 2 decades ago. They have stood united more since the world economic crisis began, despite the fact that they have nothing in common; except their desire to be recognized as a force by the World Communities.
The World Economic Forum is dominated by US and Europe, whether we like it not. The BRIC seeking more say in the World Forum is like asking to limit the power and influence of the US and Europe in Global Affairs, especially Economic matters.
Let us see where these 4 countries stand as of now:
Trades
• India, China and Brazil are members of the WTO whereas Russia is not a member of WTO.
• Russia and Brazil would benefit largely, if the commodity prices are to go up whereas India and China would prefer a low commodity prices.
Economy
• China stands 4th largest economy with an economy of $3.2 Trillion
• Brazil stands 10th with $1.3 Trillion
• Russia and India are placed at 11th and 12th places with $1.2 Trillion each.
In total they account only $6.9 Trillion or roughly 12% of the Worlds GDP.
Financial Markets
• The Market Cap of all the four countries is around 6% of the MSCI World Index.
• Not enough transparency can be found in the Financial Markets of these 4 countries.
Reserves
• Brazil has around $200 Billion
• India has around $250 Billion
• Russia has around $400 Billion
• China has the largest reserve in the world of $2 Trillion
Put together BRIC reserves (thanks to china) weighs in above 30% of the total world reserves.
Politics
• India and Brazil are democracies whereas Russia and China are not.
• Russia and China are permanent members of the UN Security Council whereas India and Brazil are not.
• Russia and China often play a highly significant role in mediating and resolving Regional problems whereas India and Brazil have different nature of neighborhood problems. Brazil enjoys a very peaceful neighborhood and India has a challenging neighbor in Pakistan.
Military Might
• Russia, China and India have Nuclear Weapons but Brazil does not have one.
Size
• Except China, the rest of the Countries are not that big in size
Let us not forget the basics of how and why the BRIC were put in one league. These four countries were identified as potential markets/economies to invest, for a good return. Almost 2 decades ago the economies of these four countries were emerging fast with a good chance of becoming a developed nation in the future. There was no other string attached to the formation of BRIC. It was easier for the Investment community to refer these 4 Emerging Economies.
Looking at the success of the Investors in BRIC, many Investment houses started focusing on other prospective and potential emerging markets/economies. To measure these markets, MSCI Inc. (formerly Morgan Stanley Capital International) created index to reflect these markets.
These 4 countries still look lucrative but none of them have grown enough to be termed as a developed economy, yet. A feet achieved by Korea without much of a hype. These 4 countries should have atleast a powerful economic prowess to seek a say. Otherwise,
It would be difficult for them to justify their push for a greater influence on the World Economy. Simply being a group of four highly potential emerging markets does not quality them.
Let us look at another scenario. The Gulf Countries control the bulk of the Oil market of the World and also have the Oil Reserves which can continue to hold the future economy. The higher oil prices in late 2007 and early 2008 have left them with a good Currency Reserve as well. Can the Gulf Countries make similar demand?
The Emerging Economies can all form an organization and address Financial and Economic issues plaguing the Emerging Economies. Even this should preferably come under the umbrella of IMF. I am of the view that the number of Groups (G8, G20, BRIC, etc) should all be structured properly and should come under the UN Economic and Social Council.
We must thank the Investment Firm that coined the word BRIC. Had they coined it as CRIB, it would have truly reflected their current situation.
P.S.: Some of the data have been gathered from the net by reading several news and articles.
These four countries together are popularly called as BRIC, a phrase coined by the US Investment firms (I think it was Goldman Sachs or Morgan Stanley) around 2 decades ago. They have stood united more since the world economic crisis began, despite the fact that they have nothing in common; except their desire to be recognized as a force by the World Communities.
The World Economic Forum is dominated by US and Europe, whether we like it not. The BRIC seeking more say in the World Forum is like asking to limit the power and influence of the US and Europe in Global Affairs, especially Economic matters.
Let us see where these 4 countries stand as of now:
Trades
• India, China and Brazil are members of the WTO whereas Russia is not a member of WTO.
• Russia and Brazil would benefit largely, if the commodity prices are to go up whereas India and China would prefer a low commodity prices.
Economy
• China stands 4th largest economy with an economy of $3.2 Trillion
• Brazil stands 10th with $1.3 Trillion
• Russia and India are placed at 11th and 12th places with $1.2 Trillion each.
In total they account only $6.9 Trillion or roughly 12% of the Worlds GDP.
Financial Markets
• The Market Cap of all the four countries is around 6% of the MSCI World Index.
• Not enough transparency can be found in the Financial Markets of these 4 countries.
Reserves
• Brazil has around $200 Billion
• India has around $250 Billion
• Russia has around $400 Billion
• China has the largest reserve in the world of $2 Trillion
Put together BRIC reserves (thanks to china) weighs in above 30% of the total world reserves.
Politics
• India and Brazil are democracies whereas Russia and China are not.
• Russia and China are permanent members of the UN Security Council whereas India and Brazil are not.
• Russia and China often play a highly significant role in mediating and resolving Regional problems whereas India and Brazil have different nature of neighborhood problems. Brazil enjoys a very peaceful neighborhood and India has a challenging neighbor in Pakistan.
Military Might
• Russia, China and India have Nuclear Weapons but Brazil does not have one.
Size
• Except China, the rest of the Countries are not that big in size
Let us not forget the basics of how and why the BRIC were put in one league. These four countries were identified as potential markets/economies to invest, for a good return. Almost 2 decades ago the economies of these four countries were emerging fast with a good chance of becoming a developed nation in the future. There was no other string attached to the formation of BRIC. It was easier for the Investment community to refer these 4 Emerging Economies.
Looking at the success of the Investors in BRIC, many Investment houses started focusing on other prospective and potential emerging markets/economies. To measure these markets, MSCI Inc. (formerly Morgan Stanley Capital International) created index to reflect these markets.
These 4 countries still look lucrative but none of them have grown enough to be termed as a developed economy, yet. A feet achieved by Korea without much of a hype. These 4 countries should have atleast a powerful economic prowess to seek a say. Otherwise,
It would be difficult for them to justify their push for a greater influence on the World Economy. Simply being a group of four highly potential emerging markets does not quality them.
Let us look at another scenario. The Gulf Countries control the bulk of the Oil market of the World and also have the Oil Reserves which can continue to hold the future economy. The higher oil prices in late 2007 and early 2008 have left them with a good Currency Reserve as well. Can the Gulf Countries make similar demand?
The Emerging Economies can all form an organization and address Financial and Economic issues plaguing the Emerging Economies. Even this should preferably come under the umbrella of IMF. I am of the view that the number of Groups (G8, G20, BRIC, etc) should all be structured properly and should come under the UN Economic and Social Council.
We must thank the Investment Firm that coined the word BRIC. Had they coined it as CRIB, it would have truly reflected their current situation.
P.S.: Some of the data have been gathered from the net by reading several news and articles.
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