BRIC as Savior of the World Economy?

There are uncertain times for the global economy. On the capital markets, it goes haywire. The United States and the European countries are groaning under their debt burden. The American economy is paralyzed and the European economies – with the exception of Germany – have no reasons to be optimistic about the future.

Is this the beginning of a new global recession? That crucially depends on how to develop the so-called emerging markets, especially the BRIC countries, Brazil, Russia, India and China. If these countries could escape the crises, then they will be the giants of tomorrow. And that’s not too distant future. According to the economists, the BRIC countries will provide nearly 30 percent of world’s GDP in 2015, significantly higher than the 13 percent provided by Euro-zone, which once contributed 20 percent of the world in 1995.

Emerging countries could be the engine of growth

In the years 2002 to 2010 the BRIC countries have contributed 12 to 21 percent of global growth in goods imports, in which China has a major share. The People’s Republic accounted for more than 60 percent of import growth. But it is also important to note that the proportion of the other three BRIC countries is widening, particularly India and Russia.

From the next year, the BRIC countries will invest nearly as much as the industrial countries in infrastructure. This is noteworthy because ten years ago the investment by developed countries was more than four times higher. Emerging economies would be the growth locomotive for the world economy. Because they buy more goods worldwide, and they invest heavily in their infrastructure.

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