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BRICS-Are they there yet?

published by Deena Zaidi

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The whole purpose of BRICS is to be self sufficient and rely less on western economies. The world’s reserves has shrunk from  90% (2004) of dollar denominated securities to 60% in 2014. But,  the growing tension individually amongst BRICS could easily defeat the purpose for which it was originally formed. Some debate that this small initiative (formation of BRICS) could be a start of a challenge that could be a big challenge for the advanced economies. For 2014 as a whole, the IMF has projected some growth for those two but very little - 0.3% for Brazil and 0.2% for Russia.
BRICS has often been compared to G-7 , that comprises of the leading economies of the world. Formed in 1975, G7 comprises of advanced economies of Canada, Japan, Italy, Germany, France, UK & USA. Russia had been a part of G7 and came to be known as a member of G8. In March, 2014, Russia was excluded due to its rising conflict with Ukraine and European Union was included  making it G8.  It has been criticised of excluding some of the major economies of China , India and Brazil. The chart gives an indication of how the BRICS still have further to go. It shows GDP (economic output) per person, which gives an indication of the level of economic development. While all the Brics have slowed this decade, the weakest performers now are Brazil and Russia. To be in par BRICS still has a long way to go
Source :IMF World Economic Database 2014 GDP based on PPP (Purchasing Power Parity) Interactive graphic. Click on chart for exact figure
The BRICS Bank marks a major step to de-dollarization, and a new monetary system. It should replace the Western-dominated “predatory casino scheme” that has contributed to world wars and “economic terrorism,” says former World Bank economist Peter Koenig.
A look at the annual GDP growth rate in 2013 as compared to 2010 when BRICS was formed
40% OF WORLD'S POPULATION
30% OF GLOBAL TERRITORY
21% OF THE WORLD'S GDP
BRICS TOGETHER COMPRISES OF
Source :IMF Interactive graphic. Click on chart for exact figure
Population is in millions Unemployment % : Percent of total labor force
SOURCE : IMF (World Economic Outlook Database, October 2014 )
Population
Unemployment
Population
Population
Population
Population
Unemployment
Unemployment
Unemployment
Unemployment
201
5.38%
143
5.5%
1,360
4.10%
1,243
52
24.73%
9.4%
GDP PER CAPITA  FOR BRICS & G-7 COUNTRIES
US $ in thousands
By: Deena Zaidi
Showing signs of recovery Political Influence on Judicial System Sticky Inflation High levels of Corruption
Foreign debt is 35% of its GDP Imposed Sanctions Due to Conflict with Ukraine Low in Exports Loss of Investor Confidence Unstable Political Issues
10th Largest Economy Largest no. of Poor people in the world Persistent Inflation Complex Mixed Economy High levels of Corruption
2nd Largest Economy of the world 2nd Largest no. of poor people in the world. High Inflation Largest population but also aging. Extraordinary Growth with 10% on average over three decades.
Smallest of the BRICS. Sluggish Growth Very High Unemployment Rate Infrastructure Backlogs Ingrained Structural Weakness
BRICS intend to set up a development bank called the 'New Development Bank' that will provide new financial channels and funding support to BRICS country. The 6th BRICS Summit in Brazil decided on the New Development Bank to be set up with its headquarters in China. The proposed bank aims to create the $100 billion for BRICS Development Bank and a reserve currency pool worth over another $100 billion . It is expected to be an alternative to other multilateral agencies and will be focused on development agenda in the BRICS countries. BRICS aims to challenge international firms like World Bank and IMF so as to rely less on the fluctuating dollar and more on each other for financial support.
CONTRIBUTION BY EACH BRICS COUNTRY IN US$ BILLION TOTAL: 100 US$BILLION
Brazil
Russia
India
China
South Africa
THE REAL PICTURE
Prof Kenneth Rogoff of Harvard University says China's slowdown is both inevitable and desirable but he warns: "It is not easy to rein in growth gradually without triggering widespread failure of ambitious investment projects."
“The economy at least escaped the recession, but the stagnation is very deep,” said Newton Rosa, chief economist at São Paulo-based asset management firm Sulamerica Investimentos. “We are in a low-growth trap.”
Source :IMF Interactive graphic. Click on chart for exact figure
Source :IMF Interactive graphic. Click on chart for exact figure
INFLATION RATES 2014 (BRICS)
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