PRESENTED BY:

Jameel Ahmed
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 REGIONAL ECONOMIC INTEGRATION

Agreements between group of countries within

a geographic region
To reduce & ultimately remove the tariff and
non- tariff barriers
to the free flow of the goods, Services and
Factors of production between each other

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 ABOUT BRICS
 BRICS stands for Brazil, Russia, India, China, and
South Africa.

 Jim O'Neill, chairman of Goldman Sachs Asset

Management, coined the BRIC concept in 2001.

 BRICS is the international political organization of

leading emerging economies.

 With the entrance of South Africa, at the 3rd BRIC’s

Summit, in April 2011, the BRIC became BRICS, with
capital "S".
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 ABOUT BRICS FORUM
 The BRICS Forum was formed in 2011

 Itis an independent international organization

that works for a structured social, economic
and environmentally sustainable BRICS block.

 Currently the forum is working on building

partnerships and collaborating with member
state institutions.
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 FOCUS OF BRICS FORUM
 To establish a development bank to balance the influence of the
World Bank and IMF, as well as creating a joint foreign exchange
reserve.
 Business
 Competitiveness
 Governance & Leadership
 Science & Technology
 Poverty
 Private Sector & Prevention of Corruption
 Investment Landscape
 Innovation in building Infrastructure
 Trade
 Healthcare 5
Chinese vs. US meat consumption
BRICs at a glance
BRIC growth: 2000-2010

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15

10

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

-5

-10

China India Russian Federation Brazil World

BRICs at a glance
GDP per capita
2010

World

Russian Federation

India

Brazil

China

0 1000 2000 3000 4000 5000 6000 7000

BRICs at a glance
BRIC populations
2010
1600

1400

1200

1000

800

600

400

200

0
China Brazil India Russian Federation
BRAZIL
10th fastest growing economies in the last centuries.
 2010: GDP growth reached 7.5%
 Extremely rich in resources such as coffee, sugarcane, crude
oil and iron etc.

 Focus on equitable development has resulted in

significant poverty reduction.

 Textiles, chemicals , iron ore , steel and motor vehicles

industries.
 Brazil today is the most popular of the BRICs so far as
foreign direct investment is concerned.

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Brazil
• World’s sixth largest economy in terms of GDP
• High level of income equality declining
• An attractive destination for foreign investors
(CIA, 2012)
• Challenges:
▫ Ease of doing business
▫ Diversification
▫ Infrastructure
RUSSIA
 Russia has capability in high-technology sectors

 Accounts for around 20% of the world’s oil and gas reserves.

 Fall in the number of people living below the poverty line.

 Consumer market of over 140 million people.

 68% of people comes under middle income group.

 Highly educated workforce.

 Third largest exporter of steel and aluminium

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Russia
• Russia is commodity-driven:
▫ 2011: surpassed Saudi Arabia to become world’s
leading oil producer
▫ Second-largest producer of natural gas
▫ World's largest natural gas reserves
▫ Second-largest global coal reserves
▫ Eighth-largest crude oil reserves
• Vulnerable to boom and bust cycles
INDIA

 1.2 billion people

 2nd largest labour force

 Diverse economy
 Services: major source of economic growth
 >50% of output
 But only 33% of labour force
 IT services is an especially competitive
sector

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India
• Promising growth (O’Neill, 2007):
▫ Increased productivity
 Openness
 Financial deepening
 Infrastructure investment
• But challenges remain:
▫ Incomplete reforms
▫ Ease of doing business
▫ Environmental degradation
▫ Education
▫ Poverty & inequality.
CHINA
 18Th fastest growing economy.

 Third largest country in land size.

 Biggest of all BRIC nations GDP wise.

 13% of people comes under middle income group..

 Holds more than $3 trillion forex reserves.

 Largest exporter/ importer for 32 and 34 countries respectively.

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 Cheap labour work force
China
• Increasingly market-oriented economy, playing
a major global role
▫ Currently the world's largest exporter.
▫ GDP second only to that of the USA.
• State-owned enterprises still play an important
role (CIA, 2012)
• Strategic planners
▫ Five Year Plans
China
• Good growth:
▫ Human capital
▫ Gradual path to openness
▫ Reform of SOEs
• Economic challenges:
▫ Stimulating domestic demand
▫ Sustaining adequate job growth
▫ Reducing corruption
▫ Environment
▫ Ageing population
China
• Demographics (O’Neil, 2009)
▫ An increasingly ageing population (One-child policy)
▫ Uneven development: coastal provinces more
developed than interior (hukou system)
• Revision of the one-child policy
▫ Slower labour force growth, could be offset by
urbanisation & human capital advances
▫ Ageing population could benefit saving & certain
sectors
▫ Pensions
▫ Unmarried males
China
• Revision of the hukou system
▫ Migration should be facilitated to allocate
resources more efficiently
▫ Other costs of migration: unemployment, job
hunting, living conditions
SOUTH AFRICA

 The South African economy is now the 23rd largest in the world

 Inflation is below 6.6% and falling.

 25% of goods produced in South Africa are for export

 Richest in terms of its mineral reserves.

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POTENTIAL MEMBERS

Indonesia, Turkey, Mexico and Germany have

been mentioned as candidates for full
membership of the BRICS,
while
Egypt, Argentina, Iran, Nigeria, Syria and
most recently Bangladesh have expressed
interest in joining BRICS

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SOME OF THE RECENT NEWS HEADLINES:

 BRICS Finance Ministers meet held in Washington.

 China becomes 1st foreign customer of Russian advanced

defense system.

 China exports slump indicates slowing global growth.

 Russia launches official website for the Ufa Summit,

April 1, 2015

 India to buy 36 French-made Rafale jets

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 FEW FACTS ABOUT THE BRICS
•The BRICS countries make up 21 percent of global GDP. They have
increased their share of global GDP threefold in the past 15 years.

•The BRICS are home to 43 percent of the world's population.

•The BRICS countries have combined foreign reserves of an estimated

$4.4 trillion.

•Intra-BRICS trade flows reached $282 billion in 2012 and are

estimated to reach $500 billion by 2015. In 2002, it was $27.3 billion.

•IMF estimates of GDP per member in 2012, China $8.25 trillion, Brazil
$2.43 trillion, Russia and India at $1.95 trillion each, SouthAfrica
$390.9 billion.

•Per capita GDP for 2012 was estimated at, China $6,094, Brazil
$12,340, Russia $13,765, India $1,592, South Africa $7,636
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SUMMITS

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 TARGET SECTORS FOR BRICS TRADE

 Manufacturing, services and agriculture

 Energy,infrastructure, mining beneficiation and

healthcare

 Construction and water provision

 The green economy and tourism

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 CHALLENGES
 Development of BRICS bank

 Reducing the rural/urban income gap

 Maintaining macroeconomic stability

 Inadequate Financial reforms

 Managing Supply Chain

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 ADVANTAGES
 India is also expected to grow faster than China after 2020

 Rising incomes in the BRICs nations will create a new middle

consumer class

 Featured as- “Roadmap For Contribution”

 Important drivers for growth in the global economy.

 Expansion of their consumer markets and the rise of

multinational companies.

 the establishment of a “positive multipolarity" in international

affairs
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 DISADVANTAGES

 Lost speed and altitude over the past two years

 Chances of Intra Trade Disputes are high

 Difficulties
of articulating their conflicting interests
in some sort of common vision became more evident.

 Different viewpoints and influence in the

international arena.

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 CONCLUSION
We believe the BRICS markets retain strong
characteristics that attract equity investors.
We can count here a strong economic growth,
favorable demographics, rich natural
resources, and strong finances.
The worries and uncertainty will likely continue
to create some angst in the global market,
But
we firmly believe that these markets should do
well in the long-term
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 REFERENCES:

 http://www.bricsforum.org/
 http://en.wikipedia.org/wiki/BRICS

 http://www.brics-info.org/

 http://www.slideshare.net/

 http://www.crisil.com/

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THANK
YOU
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