Corporate Governance

The BRIC Project: An Introduction to the Future of Economic Influence (Part 2)

By Daniel O?Connell

The BRIC nations (Brazil, Russia, India, and China), an acronym coined in 2001 by Goldman Sachs' chief economist, Jim O'Neil, represents four fast-growing developing nations.  In its 2009 report, 'The BRICs Nifty 50,' Goldman Sachs provided a deft summary of the BRICs' past and future:

"Based on long-term data published by the OECD, Brazil, Russia, India and China made up more than 50% of world GDP back in 1800. Although these numbers are only estimates, they show that the current status in which Western Europe, the US and Japan enjoy an economic leadership is an anomaly in the long sweep of history. The current rise of the BRICs economies can be seen as a reversal of the trend that started with the first Industrial Revolution. Based on GS estimates, we expect the BRICs economies to account for some 50% of global GDP by 2050. If anything, the current crisis seems to be accelerating this trend."

In the Times Online, Jim O'Neil estimates that the BRIC economies already account for approximately 15% of global GDP.  The BRIC economies include an estimated combined population of over 2.8 billion people as of 2009, or approximately 40% of the global population.  Goldman Sachs projects that over the next 30 years, 2 billion people will join the middle class (people with incomes of between $6,000 and $30,000 per year), largely from the BRIC nations.             

To put the increasing clout of BRIC economies into perspective, Goldman Sachs' consumption growth forecasts predicts that by this year, 2010, 'BRICs will contribute almost half of global consumption growth. In particular, China will contribute almost 30% of global consumption growth, more than the G3 [USA, Germany, & Japan] and almost double that of the US.'  Goldman Sachs also predicts that in 2018, one billion people will take to the skies by air travel in China alone, an annual rate which would outnumber the 790 million projected air travelers in the rest of the countries put together. 

Full post as published by The Race to the Bottom on April 01, 2010 (boomark / email).