How solid are the BRICS? An economic overview

Abstract

Over the last few decades the metamorphosis of many developing economies into emerging economies has significantly boosted global economic output, raised income levels and enabled hundreds of millions of people to escape poverty around the world. The BRICs, an acronym coined by Goldman Sachs economist Jim OíNeill in 2001, originally grouped Brazil, Russia, India and China together on the grounds that they were the most prominent subset of fast growing emerging economies. South Africa joined the group in 2011, turning BRICs into BRICS. Although they are drawn from four different continents and have alternative systems of government, the BRICS members were combined on the grounds that they were populous emerging economies whose living standards, measured on an income per capita basis, have grown quickly over past decades. As a result they have spawned sizeable middle classes and are each destined to become major players in the world economy by 2050, even though per capita incomes still fall considerably below OECD economy levels. The BRICS accounts for roughly 40 per cent of the worldís population and about 30 per cent of the worldís GDP, and according to the IMF (2011) will contribute more than half of the world economyís growth in coming years. The BRICS, like all emerging economies, has generally benefited from the globalization phenomenon of the past few decades, as manifested in increased international trade flows and higher levels of foreign direct investment affecting all parts of the world.