Brics Case Study

This case focuses on Brazil's development strategy since World War II and on the change of the economic model following the debt crisis of the 1980s. At the time of the case Brazilian officials are deciding whether regional integration or globalization offer the best route to economic prosperity and development. This case illustrates the challenges that developing countries face in defining trade policy. It also introduces the role of regional trade blocks as an alternative to globalization. At the current time regionalism seems to be very much in vogue and seems to be much more likely to be the basis for future trade system changes than comprehensive trade treaties.

The process of integration of economies around the world, known as globalisation, has catalysed the development of Brazil as a powerful emerging economy, through the expansion of trade and investment. Emerging countries are defined as those progressing toward becoming more advanced, through rapid growth and industrialisation. Consequently, Brazil’s rapid economic growth has secured its place in BRICS, an association of five major emerging economies, Brazil, Russia, India, China, and South Africa.

Today’s Global economy is governed by a delicate balance of variables. The addition of a new economy to the global market affects all of the pre-existing variables, bringing with it a host challenges and opportunities. Much like an initial public offering, countries may “buy -in” or develop economic agreements with the emerging market economy (EME). This often results in the country “buying-in” to the emerging economy, getting services or products at a discounted rate, while the emerging economy gets business like China and the United States. These types of agreement may result in the poorer country sacrificing its citizens’ well being, to ramp up for economic growth, like China. In the end most countries economies are interconnected for example with the United States-Canada relationship. If one country’s economy were to collapse there would be strongly adverse effects on the

Countries are divided into two major categories by the United Nations, which are developed countries and developing countries. The classification of countries is based on the economic status such as GDP, GNP, per capita income, industrialization, the standard of living, etc. DEVELOPED COUNTRIES refers to the sovereign state, whose economy has highly progressed and possesses great technological infrastructure, as compared to other nations.

Over the years the global economy has seen a rise in so called ‘emerging markets’. These are developing economies which have exceeded economic performance in respect to their developing counterparts. These economies are newly industrialized and are on their way to becoming developed economies but have not yet reached that status. The more common and likely heard developing economies consists of BRIC (Brazil, Russia, India, and China) followed by Mexico, South Korea, Turkey, Saudi Arabia, and Indonesia. Developed nations (MEDC) include the westernised countries such as the U.S, the U.K and Japan. In 1999, Dr. Kvint published this definition: "Emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM (Global Emerging Market), an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions" This essay will locate the common characteristics that emerging markets share.

Currently, economic world are more dynamic. Many developed countries such as European Union, US, and Japan as the largest economic are going to be overtaken by developing countries, particularly BRIC. BRIC stands for Brazil, Russia, India, and China. Those countries are growing rapidly and making contribution to the world economy as Goldman Sachs (2010) said, “Between 2000 and 2008, the BRICs contributed almost 30% to global growth in US Dollar terms, compared with around 16% in the previous decade”. Furthermore, even Goldman Sachs predicted in 2050 the BRIC could account for almost 50% of global equity markets. This essay will compare and evaluate critically economic growth prospect of China and Brazil as two BRIC countries in the context

The increased importance of BRIC countries, new production opportunities and developing markets (BBC News, 2010).

I recommended Brazil because of its large labor pool, vast natural resources, and its regional impact in South America. It is the leader in the region. Brazil together with Russian, India and China are called BRIC countries, four most rapidly growing developing countries.

Brazil is known for its inequality in terms of incomes. Decision-making is often done by the senior management. Gradually building a working relationship is crucial to one’s success as an outsider. Business practices differ by region. In the major cities such as Rio de Janeiro, São Paulo, and Curitiba, many companies have started dealing with international businesses.

Yet, in spite of the unpredictable nature of these hopes, as of mid-2009, Colombia had been placed in a group of burgeoning economies similar to the BRIC countries called CIVETS, consisting of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa (Allen, 2011). These emerging economies have shown important growth potential based on their size, young populations, good

Brazil is a nation known for its agriculture and tourism, but it did not obtain the world’s seventh largest nominal GDP simply by relying on those industries alone (World Bank, 2014) . Brazil is one of the largest countries in both Central and South America by geographical area, and by population. Though proud of its traditions, Brazil has embraced and assimilated with American business customs to create a strong partnership. Within this decade, global organizations FIFA and the Olympics chose to locate their events, among all other nations, in Brazil. US based companies such as IBM, Hewlett-Packard, Electronic Data Systems, and Whirlpool have expanded their offshoring activities to Brazil, and even Indian IT based companies

BRIC countries have been projected by economists to be some of the emerging economies in the near future. There is increased market potential in those countries hence leading to the possibility of more firms developing their roots in those countries. These projections are facilitated by the high population growth rate being experienced in those countries hence providing market and cheap labor for production.

The countries of Brazil, Russia, India, and China, dubbed “BRIC” by Goldman Sachs’s Jim O’Neil, have been grouped together because they are in the same stage of economic development but can’t quite be considered developed countries. Recently, these countries have experienced explosive growth in Gross Domestic Product (GDP) and overall global trading power. Since 2008, when most of the world’s developed nations were in periods of slow growth, no growth, or even contraction, these developing countries were experiencing high growth, sometimes in the double digits percentages. These countries have done this by seeking out opportunities for cooperation in trade, investments, infrastructure development and other areas.

At around the same time, Jim O’Neill, the head of global economic research at Goldman Sachs, coined the acronym “BRICs” to refer to Brazil, Russia, India, and China, the emerging market

The ITC supports developing and transition economies, and particularly their business sector, in their efforts to realize their full potential for developing exports and