Potential of World’s Largest Emerging Economies: BRICS Analysis

This essay provides an in-depth analysis of the BRICS nations (Brazil, Russia, India, China, and South Africa), examining their economic potential and global influence. It explores the historical context of the BRICS formation, the economic growth predictions made by Goldman Sachs and other institutions, and the challenges faced by these nations. The essay highlights China's potential to lead the world economy, the importance of mutual collaboration, and the role of the BRICS bank. It also discusses the strengths of the BRICS countries, including their large populations, industrial capacity, and lower labor costs. The essay addresses various issues like debt burdens, social and environmental considerations, and the need for institutional reforms. It concludes by emphasizing the importance of BRICS in global economic development and the potential for future growth and collaboration among these nations.

Running head: POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES:
BRICS
Potential of World’s Largest Emerging Economies: BRICS
Name of the university
Name of the student
Author note

1POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
The purpose of this essay is to present the current situation of the political dialogue,
which was organised in the year 2006 and later, formed into BRICS club. Chief economist of
Goldman Sachs, Jim O’ Neil was the first person to coin the term BRICS, made up of five
countries including Brazil, Russia, India, China and South Africa. Later in 2011, it appeared
as independent global organisation with the motive of sharing equal effort to keep a balance
between nations in economic, cultural and political sectors.
Although, if according to importance it has been arranged it must be CIRB, yet
economists felt the term BRIC is market friendly. Before the interference of South Africa it
was termed as BRIC. After the summit of 2010, it was internationally known as BRICS
countries. According to Menon (2017), these countries are known for their potential of
economic growth. Therefore, this essay will analyse and explore current economic condition
of BRICS nation and their potential to conquer economic power to compete with the
strongest nations by the middle of 21st century. Mutual relationship between the nations are
based on non-interference policy and nations believe in equal distribution of benefits among
them. The contemporary chair person is from Russia and the seventh summit was conducted
by them on 15th July, 2015.
According to the predictions of Goldman Sachs, within 2050, the US will be the only
western country which has a chance of securing place into the top five. The list of worlds’
largest economic power China will be the leading one just before US. However, the
difference between these two is going to be much higher than it is now. Among the BRICS
countries, China can lead the world economy if they can match America’s GDP rate by 2027.
The collective count of BRICS’ GDP should come in parallel with USA by 2032 if growth
rate remains the same. Even according to a prediction by The World Bank U.S currency will
lose its dominant nature globally and China’s renminbi will come into an equal rate. One of

2POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
the greatest success of China is to surpassed Japan and securing the place of second largest
economy of the world.
Apparently, two central reasons can be found behind such collaboration. The first and
foremost reason was to challenge the prolonged superlative status of America forming a
substitute organisation to IMF and World Bank (Shetiya). Apart from that, to have mutual
assistance in procedures of development plans within a self-operated structure without any
foreign aids or assistance. In order to make their initiatives stronger, as per the study of Basha
(2018), nations even working on forming BRICS bank to self-finance themselves.
Studying BRICS is significant as it delivers knowledge about economic direction. The
reasons why these nations are considered to unite into such an organisation Gunasekaran,
Jabbour and Jabbour (2014); are that all of these countries are capable of Bulk production
irrespective of industrial boundaries, workforce is greater than the numbers of job profiles
and cost of labour maintenance is lower than other countries. Moreover, emerging strongest
economies has a tendency of rapid growth depending on real estate, oil and energy plants;
both the telecom and automobile, retail, IT and pharmacy sectors chiefly. With such
promising growth prospect, if nations can collaborate with each other, there is a possibility of
competing with even the strongest economy of the world. However, while executing the
agendas of BRICS several issues are raising due to unpredictable nature of world economy.
According to Carducci and Bruno (2014), before moving into weakness and future
challenges, the strength and performance can be evaluated first. There are certain figures,
which show their collective capability to perform significantly in world’s economic platform.
The countries current occupy 42% of the total world population; no less than 26% of the total
land area and contribute 14% of the world’s GDP. According to IMF World Economic
Outlook Database, recorded in April 2018, China was the highest in terms of GDP. Whereas

3POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
in terms of average annual gain South Africa has scored the highest. As argued by Mostafa
and Mahmood (2015), while counting the combined share of global GDP, it has been noticed
that BRICS is in a good position as compared to G7 countries. However, it will take time to
develop and fulfil the objectives of BRICS. Goldman Sachs has forecasted BRICs economic
growth, which predicts China to be the top contributor in terms of economic growth
(Hongfeng, 2017).
Therefore, it can be summarized that, as mentioned before, economic collaboration of
these five countries are important because of their ascending rate of growth and the most
promising emerging economies. Moreover, they occupy half of the entire world population
and according to recent reports; their contribution covers a major part in world GDP
progression. Economists have already predicted that it is only a matter of few years for China
to become the biggest economy. According to such predictions, supported by recent
evidences, it can happen anytime in between 2030 to 2050. Along with that if current pattern
of growth is followed, a nonprofessional can even understand this nations will be the most
powerful economical territory. They can even be counted under 10 largest economies of the
world.
People may argue apart from this growth parameter what factors have made them
together forming one group working together on shared objectives. To be honest there are
very few factors which are similar about them. All of those countries are in category of
investment and mutual political and economic collaborated have been established. Once in
2008, when they met together in a summit, economists believe it was for transforming the
economic collaboration into a political one. In case, they become successful in cresting
economic order with the club then China can supervise manufacturing industry, Russia,
Brazil can regulate raw materials and natural resources, and India can be the hub for
outsourcing and services. As argued by Kelsey (2015), businesspersons will be interested in

4POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
to invest in the field of these nations and their enhanced economic value is dependable on
their joint effort towards increasing GDP rate.
Irrespective of economist’s predictions, there are some practical objectives of BRICS
group. Those are as follows. 1) To act as a linkage between developed and developing
countries, as instance in front of world trade organisation this group of nations are trying to
escalate the matter of unfair agricultural policies and bringing justice. 2) Far beyond assisting
in economic platform these nations are working as a group who shares information regarding
development of education, culture, health and environment. 3) Every nation will share benefit
in terms of regional development if assisted by rest of the four nations. 4) The joint initiative
will be increasingly significant as they are assisting developing nations in terms of
development of business scenario within a competitive environment Shen et al. (2017).
Although, the group used to be recognised for rapid financial growth, the current
situation reflects serious political and economic crisis. There are two major aspects, which
indicates the upcoming disaster. At first, debt burden is getting higher over these nations due
to an increase of Federal rate and secondly, there income from exporting has become low due
to the falling price of regular commodities across the world. In addition to that, it has been
reported, China’s business structure has been transformed as it has started to depend on
domestic consumption of goods instead of exported materials. Undoubtedly, this has become
the most terrifying factors as far as the economic collaboration is concerned. Among these
five economical platforms, India is promising for potential and accelerated growth pattern
being the importer of crude oil and other goods whose prices have fallen globally. As the
country is self-sufficient in terms of natural resources and agricultural production, it does not
have to be dependent on exportation for its economic propriety. Since the occurrence of
global economic crisis, China’s economy is progressing slowly as of the beginning of 2016.

5POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
India is consistently struggling to achieve a stable position and has considered several foreign
aids in terms of improvements.
The last decade has experienced BRICS’ moderate rate of success until the incident of
military standoff between India and China, which has increased political tension between
these two nations. Next big thing is China’s initiative of developing a BRICS plus model. As
argued by Cooper and Farooq (2013), both the event questions objective of establishing a
global model of governance in terms of aligning BRICS objectives with individual national
agendas.
Although, except India rest of the nations have confronted with an economic decline,
the social environments differ from one country to another. It has been observed minutely
that only economic development does not ensure a developed lifestyle. The data collected by
practical survey support the fact that in spite of being economically stronger Russia cannot
beat Brazil and South Africa in terms of social progression (Staniste, 2015). It is important to
address social issues as soon as possible, as it highly affects the economic prosperity of any
nation irrespective of its developed or developing status. As instance, India needs to invest
more resources to satisfy basic requirements of the fellow citizens. On the other hand, as
described in Dhanavandan, Tamizhchelvan and Mary (2014), although these countries are in
a stable economic position institutional structure must be changed in terms of protecting the
rights of Chinese and Russians. Moreover, study of Ozturk (2015) suggests, along with social
development, environmental issues must be addressed by adopting energy efficient, green
technologies, which will be able to mitigate the human issues without harming environmental
balance. A reading of Klafke et al., (2015) suggests the joint implementation of policies to
reduce the emission of greenhouse gases will create immense impact on global measures
against pollution and global warming. Apart from these fragmented issues identified by the

6POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
researchers and economists, Brazil and South Africa must work on social sectors to protect
the relationship among the nations (Strizhakova & Coulter, 2013).
Therefore, considering the differences in socio-economic scenario of every nation
scholars have observed a little chance of this bond to work out in future days. While
predicting the facts and figures related to BRICS for the next decade a distinct reason has
been highlighted that there is no specific logic which can bound these five nations together.
They are different in terms of geographical features firstly. Although, all of them are
emerging fastest growing economies still each one of them are in different stages of
development process. Hence, it is unjustified to categorizing them into one group. Political
and social structures are too different to compile them under on category. However,
economist do not consider these facts as obstacles as far as their objectives are concerned. As
per the study of Larionova (2016), mutual assistance can help them to resolve regional issues
and it has potential of boosting global economy as well according to the reports presented in
World Trade Organisation. The objectives are decided after receiving the approval of all the
five countries and this establishment is highly pragmatic and contemporary too. As per
Stuwe, Bellanger and Picon (2014), the advantage of diversity is that one country can take
lessons from the other one before reacting on same kind of social or environmental issues.
Therefore, such geopolitical collaboration is expected to make a difference in upcoming
decade in terms of social sustainability (Stender, 2016).
For the coming decade, BRICS members have decided to be more relevant in terms of
shared goals like the previous decade. They were successful in identifying mutual points of
benefits and common interests to work on further. Their further agenda is to develop making
a new model of BRICS comprising of other developing countries in order to work on their
flaws (Kolachi & Shah, 2013). Besides, according to Ali et al. (2018), UN’s one of the
sustainable development goal is to maintain environmental balance throughout the world.

7POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
Working towards an energy alliance and policy will help to ensure financial progress on
environmental sustainability.
Hence, it can be concluded from the above discussion that BRICS nations as
compared to other developed and emerging economies have better intentions for the world
economy. Their current rate of growth indicates their potential of sustainability. Although,
according to the economists observation BRICS is lagging behind G7 countries as of now yet
it can be expected that within a 2050 China will be the most superior economic power if the
progression rate remains same. However, three decades is not a short span for confronting
several twists and turns. Expectation is BRICS will be capable of maintaining this
development through channelizing global businesses, improving technological fields aligning
with environmental interests, developed procedure of exports and imports and foreign
investments. Apart from all these aspects, it is crucial to remain tolerant for each other as well
as aligning collective motive with the individual national agendas.

8POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
References
Ali, S., Hussain, T., Zhang, G., Nurunnabi, M., & Li, B. (2018). The Implementation of
Sustainable Development Goals in “BRICS” Countries. Sustainability, 10(7), 2513.
Basha, J. (2018). FINANCIAL PERFORMANCE OF BANKS OF BRICS-A
COMPARATIVE STUDY. INDIAN JOURNAL OF APPLIED RESEARCH, 7(9).
Carducci, M. and Bruno, A.S., 2014. The BRICS countries between justice and economy
methodological challenges on constitutional comparison. Sociology and
Anthropology, 2(2), pp.46-58.
Cooper, A. F., & Farooq, A. B. (2013). BRICS and the Privileging of Informality in Global
Governance. Global Policy, 4(4), 428-433.
Dhanavandan, S., Tamizhchelvan, M., & Mary, A. I. (2014). A Study on Current Scenario of
Institutional Repositories among BRICS Countries. International Research: Journal
of Library and Information Science, 4(4).
Gunasekaran, A., Jabbour, C. J. C., & Jabbour, A. B. L. D. S. (2014). Managing
organizations for sustainable development in emerging countries: an
introduction. International Journal of Sustainable Development & World
Ecology, 21(3), 195-197.
Hongfeng, L. (2017). A review of Chinese studies on the role of the BRICS in global
governance. Hermès, La Revue, (3), 165-172.
Kelsey, E. (2015). Towards a new international investment paradigm? Taking the BRICS
seriously.

9POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
Klafke, R. V., de Barros Ahrens, R., da Silva, R. G., Pilatti, L. A., & de Francisco, A. C.
(2015). Air pollution indicators in Brazil, Russia, India and China (BRIC)
countries. Scientific Research and Essays, 10(16), 513-521.
Kolachi, N. A., & Shah, H. A. (2013). BRICS countries and their strategic HRD agenda in
2020. International Journal of Management & Information Systems (Online), 17(2),
105.
Larionova, M. (2016). Russia’s 2015 BRICS Presidency&58; Models of Engagement with
International Organizations. International Organisations Research Journal, 11(2),
113-139.
Menon, A. A. (2017). Performance of Economic Growth in BRICS Countries.
Mostafa, G., & Mahmood, M. (2015). The rise of the BRICS and their challenge to the
G7. International Journal of Emerging Markets, 10(1), 156-170.
Ozturk, I. (2015). Sustainability in the food-energy-water nexus: Evidence from BRICS
(Brazil, the Russian Federation, India, China, and South Africa) countries. Energy, 93,
999-1010.
Shen, L., Shuai, C., Jiao, L., Tan, Y., & Song, X. (2017). Dynamic sustainability performance
during urbanization process between BRICS countries. Habitat International, 60, 19-
33.
Shetiya, R. M. BRICS New Development Bank: An Option to World Bank-IMF?.
Staniste, M. M. (2015). Humanitarian interventions, responsibility to protect versus state
sovereignty. The BRICS countries perspectives. International Journal on Humanistic
Ideology, 6(2), 57.

10POTENTIAL OF WORLD’S LARGEST EMERGING ECONOMIES: BRICS
Stender, M. (2016). Social Bricks?: Integrating Social Sustainability in Housing and
Neighbourhoods. In Secretariat Sustainable Housing 2016. Green Lines Institute for
Sustainable Development.
Strizhakova, Y., & Coulter, R. A. (2013). The “green” side of materialism in emerging BRIC
and developed markets: The moderating role of global cultural identity. International
Journal of Research in Marketing, 30(1), 69-82.
Stuwe, L. T., Bellanger, M. M., & Picon, P. D. (2014). Hta In The Brazilian Health Care
System and Potential Lessons Learned For Other Brics States. Value in Health, 17(7),
A444.