Definition
BRICS is an acronym that reference the countries of Brazil, Russia, India, China, and South Africa. These countries are all considered to be at a similar stage of emerging economic development. The term was coined in 2001 and these nations often work together on economic and political issues.
Key Takeaways
- The BRICS countries are an association of five major emerging national economies: Brazil, Russia, India, China, and South Africa. They came together to use their growing economic power to influence global affairs.
- These nations are noted for their fast-growing economies and significant influence on regional and global affairs. They are all members of G20, reflecting their growing economic might.
- The concept of BRICS nations often signifies a shift in global economic power away from the developed G7 economies towards the developing world. This is due to their combined economies accounting for nearly half the world’s population and around 25% of the world’s GDP.
Importance
The term “BRICS Countries” is significant in finance as it represents five major emerging national economies: Brazil, Russia, India, China, and South Africa.
These countries together make up about 42% of the world’s population, 26% of the world’s geographic area and about 22% of the world’s Gross Domestic Product (GDP). BRICS Countries play a crucial role in the global economic landscape due to their growing economic power and influence.
The economies of BRICS countries are distinguished by their large, fast-growing markets and their significant influence on regional and global affairs.
Therefore, they are often the focus of investment opportunities, economic studies and international business strategies.
Explanation
The BRICS Countries is an association comprising five significant emerging national economies: Brazil, Russia, India, China, and South Africa. Established in 2009, the primary purpose of this group is to encourage commercial, political and cultural cooperation among the member nations.
The BRICS nations represent about 42% of the world’s population and roughly 23% of the gross world product, exercising considerable influence over regional affairs and very significant influence on global economic matters. The BRICS grouping has embarked on numerous initiatives geared towards fostering mutual development and integration.
These initiatives include establishing the New Development Bank (NDB), intended to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, and a Contingent Reserve Arrangement as a framework for providing protection against global liquidity pressures. Combining the strengths of these five important economies enables them to better negotiate in international forums and markets, increase trade among themselves, and collectively address challenges such as financial crises or the impact of climate change.
Examples of BRICS Countries
Brazil – In 2019, Brazil, being one of the BRICS countries, saw the growth of its economy through an increase in its industrial production and exports, and by attracting more foreign investors. Its primary sectors like agriculture, mining, manufacturing and service sectors became key drivers of its economic development and improved the financial conditions of the country.
India – India is another example of a BRICS country which is characterized by a rapidly growing economy. It attracts significant foreign direct investment in multiple sectors due to its large consumer market and a cheaper labor force. The IT sector of India is a high contributor to the economy. In financial terms, India has effectively capitalized on its status as a BRICS country to encourage international trade and investment.
China – As the second-largest economy in the world, China is a dominant figure in BRICS. The country has used its BRICS membership to influence global financial and trade rules. Its Belt and Road Initiative has also been a significant drive for investment and infrastructure development in BRICS countries. In finance, the China-led Asian Infrastructure Investment Bank and the New Development Bank established by all BRICS countries are another testament to China’s financial influence.
FAQs about BRICS Countries
What does BRICS stand for?
BRICS is an acronym for the five major emerging national economies: Brazil, Russia, India, China, and South Africa.
When was BRICS formed?
The term was coined in 2001 by then-chairman of Goldman Sachs Asset Management, Jim O’Neill. However, the group itself was formed in 2006.
What is the aim of BRICS?
The BRICS aims to encourage commercial, political, and cultural cooperation between the five nations. They have significant influence on regional affairs and are potential large-scale influencers on world matters.
How do BRICS countries impact global economy?
Together, the five BRICS countries represent about 25% of the world’s land coverage and 40% of the world’s population, making them crucial in the global economy. They are noted for their fast-growing economies and significant influence on regional and global affairs.
What is the BRICS New Development Bank?
The New Development Bank (NDB) is a multilateral development bank established by BRICS nations. Its main purpose is to finance infrastructure and sustainable development projects in BRICS nations and other emerging economies and developing countries.
Related Entrepreneurship Terms
- Emerging Markets
- Economic Growth
- New Development Bank (NDB)
- Foreign Direct Investment (FDI)
- Goldman Sachs’ “Next Eleven”
