Meet the BRICs

1
Meet the BRICs
Nuno Domingues nr. 6936 Mariana Marques nr.
6832 Jacopo Piana nr. 8427
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G7

• The Group of Seven (G7) is an organization of the
  worlds seven biggest industrialized countries
  United States, Japan, United Kingdom, France,
  Germany, Italy and Canada.
• Most powerful countries deciding guidelines for
  the international economy and international
  organizations.
• They share the same economic system and
  democratic principles.
• They account more than a ½ of total global GNP.

3
BRICs

• The BRICs is the term used to refer to the
• combination of Brazil, Russia, India and
• China.
• The economies of the BRICs are rapidly
• developing and by the year 2050 will eclipse
• most of the current richest countries of the
• world.
• In less than 40 years, the BRICs economies
• together could be larger than the G7 in US
  dollar
• terms. By 2025 they could account for over
  half
• the size of the G7. Currently they are worth
  less
• than 15.

4
The Path to 2050

• 2016 Chinas economy will be the 2nd biggest
  economy, following U.S.
• 2032 Indian economy will be larger than Japans,
  being the 3rd biggest economy.
• 2041 Chinas economy is the biggest economy.
• 2050 Brazil, Russia, India, and China become
  among the six most dominant economies.

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To many the most dramatic outcome is the looming
shift in the center of global economy. In fact,
by 2050, four of the six biggest economies in the
world (China, India, Japan, Russia) will be in
greater Asia. Of the current G7 only the US and
Japan may be among the six largest economies in
US dollar terms in 2050.
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Reasons BRICs overcome G7

• Important part of worlds population
• Alliances between BRIC countries, political
  cooperation to extract political concessions from
  the United States
• Aging working population and falling productivity
  in G7countries
• India and China as major suppliers of
  manufactured goods and services
• Russia and Brazil as commodities suppliers to
  India and China

7
BRICs political and economic changes

• Political systems changed to embrace capitalism.

Command mixed economies

• development of economically sensible policies,
  open trade and domestic markets
• stable institutions that support a long-standing
  economic growth

Free markets

• Those measures lead to economic growth with a
  stronger currency.

8
BRICs impact on global markets

• Transition period will be in the next 20 to 30
  years long term companies strategy must take
  into account these countries.
• Stages
• Commodity markets
• great demand driven by the BRICs economies
• Consumer markets
• rise in middle class demand
• Increase in demand for durable products
• Capital markets
• high returns
• capital demand will increase
• stronger national currencies

9
Conclusions

• By 2050 BRICs citizens are still likely to be
  poorer on average than the individuals in the G7
  economies.
• India will have the fastest growth on the next 30
  to 50 years, due to its rising in working age
  population
• The pillars of the economic decisions will be
  shifted from North America and Europe to Asia
• High Asian growth will probably induce a growth
  on their neighbours.
• BRICs are an important market for almost all kind
  of companies, given the high growth potential.