Brazil, Russia, India And China - BRIC

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What does 'Brazil, Russia, India And China - BRIC' mean

Brazil, Russia, India and China (BRIC) refer to the idea that China and India will, by 2050, become the world's dominant suppliers of manufactured goods and services, respectively, while Brazil and Russia will become similarly dominant as suppliers of raw materials. Due to lower labor and production costs in these countries (now including a fifth nation, South Africa), many companies have also cited BRIC as a source of foreign expansion opportunity (promising economies in which to invest).

In 1990 BRIC nations accounted for 11 percent of global GDP; in 2014 this figure had risen to nearly 30 percent, including a high in 2010, following a plunge in value, surrounding the 2008 financial crisis.

BREAKING DOWN 'Brazil, Russia, India And China - BRIC'

BRIC is an acronym for the economies of Brazil, Russia, India, and China combined, originally projected to be the fastest growing market economies by Jim O'Neill of Goldman Sachs 2001. It has been postulated that by 2050 these economies would be wealthier than most of the current major economic powers.

The Goldman Sachs thesis does not argue that these countries are a political alliance (like the European Union) or a formal trading association; instead, it asserts they have power as an economic bloc. BRIC countries haven’t announced any formal trade agreement, but leaders regularly attend summits together and often act in concert with each others’ interests.

BRIC is now also used as a more generic marketing term. For example, Columbia University has established the BRICLab, where foreign, domestic, and financial policies of BRIC members are examined.

Introduction and Early Writing on BRIC 

In 2001 Jim O’Niell wrote a report, published by Goldman Sachs, noting that while global GDP was set to rise 1.7% in the next year, BRIC nations were forecasted to grow more quickly than the G7 (group of seven most advanced global economies, including Canada, France, Germany, Italy, Japan, the United Kingdom and the United States). In the paper "Building Better Economic BRICs" O’Niell runs through four scenarios for measuring and projecting GDP, adjusted for purchasing power parity (PPP). In these scenarios, nominal GDP assumption for BRICs rises from the 2001 measurement of 8% in USD, to 14.2% -- or, when converted at PPP rates, 23.3% to 27.0%.

In 2003 Dominic Wilson and Roopa Purushothaman wrote a report "Dreaming with BRICs: The Path to 2050," again published by Goldman Sachs, claiming that by 2050 the BRIC cluster could grow to a size larger than the G7 (in USD). The world’s largest economies would thus look drastically different in four decades, with the largest global economic powers no longer being the richest (by income per capita).

In 2007 "BRICs and Beyond" was published, focused on BRIC growth potential, along with the environmental impact of these growing economies and the sustainability of their rise. The report considered a Next 11, or N-11, (a term for eleven emerging economies) in relationship to the BRIC nations, as well as the overall ascendency of new global markets.

Criticism of BRICs

O’Neill’s BRIC thesis has been challenged over the years as the economic and geopolitical climate has shifted. Arguments include the notion that raw materials in BRIC nations China, Russia, and South Africa are limitless. Those critiquing the growth models say they ignore the finite nature of fossil fuels, uranium, and other critical and heavily used resources. It has also been argued that China outstrips the other BRIC members economies in GDP growth and political muscle, putting it in a different category.