Loading the player...

What does 'Brazil, Russia, India and China (BRIC)' mean

BRIC (Brazil, Russia, India and China) refers 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 relation 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.

RELATED TERMS
  1. Brazil, Russia, India, China And ...

    Brazil, Russia, India, China and South Africa (BRICS) is an acronym ...
  2. BRIC ETF

    A BRIC ETF is an exchange-traded fund invested in securities ...
  3. MSCI BRIC Index

    The MSCI BRIC Index is an index measuring the equity market performance ...
  4. Dow Jones BRIC 50 Index

    The Dow Jones BRIC 50 Index is a market capitalization-weighted ...
  5. EAGLES Investing

    EAGLES is an acronym describing the economies of Korea, Indonesia, ...
  6. Russia ETF

    Russia ETFs seek to replicate broad market Russian averages; ...
Related Articles
  1. Insights

    Ways To Invest In Developing Countries

    Here is a review of potential investments in the BRIC nations and other developing countries around the world.
  2. Trading

    An Active Trader's View on BRIC (EWZ, RSX)

    An analysis of how active traders will look at trading the BRIC economies over the weeks/months ahead.
  3. Financial Advisor

    The Case for Emerging Markets in 2016

    Read a bearish take on emerging market equities and bonds for 2016 and why structural and political challenges could signal danger for investors.
  4. Investing

    5 Hot Indian Stocks

    Some of these Indian stocks have returned 40%+ YTD, which shows the growth potential of this growing economy.
  5. Insights

    5 Financial Threats to Watch in 2016 

    There is no shortage of worrying news in the global economy for 2016.
  6. Investing

    Economics Report: Compare and Contrast India vs. Brazil (PBR)

    Find out why Brazil and India, two of the largest and most important emerging market economies, appear to be headed in very different directions.
  7. Investing

    Are Corruption and Growth Conjoined?

    When you line up the corruption index with the fastest growing economies, the top 5 developed economies aren't above 70th place on the corruption index.
  8. Investing

    Top Indian Stocks For American Investors

    American investors looking to diversify their portfolio to include Indian stocks can do so easily by purchasing shares ADRs of Indian stocks.
  9. Insights

    Investing In Russia: A Risky Game?

    You might be better off playing roulette if you don't understand the risks of investing here.
  10. Insights

    How Can Emerging Markets Avoid The Middle-Income Trap?

    Emerging markets all reach a point when rapid growth stops. We look at ways to avoid this and move to the next level.
RELATED FAQS
  1. Is real GDP a better index of economic performance than GDP?

    Learn why real GDP is a better index for expressing the output of an economy, as it takes into account the factors that distort ... Read Answer >>
  2. How does the price of oil affect Russia's economy?

    Discover how the price of oil affects the Russian economy. As a net exporter of oil, Russia depends on robust oil prices ... Read Answer >>
  3. When do economists use real GDP instead of GDP?

    Learn about the purposes for which economists rely on real GDP. Find out how real GDP is calculated and how it is important ... Read Answer >>
  4. How does the United States government measure economic growth?

    Find out how the Bureau of Labor Statistics and the Bureau of Economic Analysis measure economic growth in the United States ... Read Answer >>
  5. How does the stock market affect gross domestic product (GDP)?

    Find out how the stock market affects gross domestic product (GDP) through two different channels: financial conditions and ... Read Answer >>
  6. How does gross domestic product (GDP) affect standard of living?

    Find out how gross domestic product is used to measure standard of living. Find out which alternative metrics rely on GDP ... Read Answer >>
Hot Definitions
  1. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  2. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  3. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  4. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  5. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  6. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
Trading Center