BRICS Countries
By: Juan Carlos Munoz-Najar
The countries that make up the group called BRICS - namely, Brazil, Russia, India, China and South
Africa - have progressively generated a block that was initially focused on the commercial
development of member countries and that has progressively extended to some other fields, for
example politics.
1. Description of the economy of each of these nations.
The following is a breve description of the economy of each BRICS country:
A. Brazil:
Two urgent challenges have Brazil: weak labor market and a high debt service. Some details:
Despite the wages growth, they remain being low.
The credit is quite needed due the low wages and banks interests are expensive for households;
so families prefer paying interests and spend less.
The impossibility of the economic rebound - in the short term - and the decrease in exports from
neighboring countries that do Brazilian trade do not invest more.
There is a certain increase in the country's
productive capacity, but it is not the
highest in its history.
There has been a growth in domestic
consumption; however, it should grow to
increase investments. Low wages are not
very helpful in this.
Exports have stopped their growth.
State spending slows and also impacts the
country's economy.
The inflation of the country has decreased
since 2016; however the demand continues
being low. That is why government has
being doing efforts to incentivize consume.
In conclusion, the recovery of Brazil is slow and the measures for greater and faster growth do
not seem to be seen in the short term. There is some hope with what would be a change of
government in the present year 2020; however, the country does not have a simple challenge to
face.
The information in this point A. has mostly been obtained from Barua, 2020.
B. Russia:
In the Russian case, moderate growth and moderate reduction in poverty are expected for the
current year and the coming ones. The expected growth for 2020 is 1.6; by 2021, 1.8.
It is considered that a restrictive monetary policy and investment in national projects will give
the desired rebound to the Russian national economy.
Increasing existing resource verification programs and expanding their reach would help achieve
the goal of halving poverty by 2024.
Definitive risks for Russian growth are those that have to do with the current weakness of the
global economy, the strong commercial tensions facing Russia and certain internal details.
Among the commercial tensions, which could replicate national and foreign investment, we can
see some tense international relations and the exposure to economic sanctions.
Russia will have to make efforts regarding the successful and efficient government
implementation of infrastructure investment initiatives.
Regarding the rapid expansion of the availability of credit by the population, the State has
intervened with regulatory measures; however, it
will be important to continue regulating this aspect
to avoid financial stability risks.
The diversification of Russian exports has taken
place, but not at a promising speed. The basic
element of its export growth has been the increase in
the price of oil.
In 2017, its oil exports accounted for 59% of total
exports; In 2018, they grew to 65%.
Good export opportunities are expected with the
Eurasian Economic Union (EAEU), as with Serbia,
Singapore and Iran.
The information in this point B. has mostly been obtained from World Bank Group, 2019.
C. India:
It is the third most important buyer in the world.
It has an approximate population of 1.2 billion people.
Its natural aspiration is the improvement of the life of its
inhabitants, thinking of becoming by 2030 a country of high
middle income.
Between 2011 and 2015, more than 90 million Indians left
extreme poverty and now enjoy a better standard of living.
Being that in the two decades before 2015, poverty has been
reduced from 46 to 13.4%.
Like most countries, in recent years - in the case of India, 2- its
growth has slowed.
The country's policies are all aimed at continuing to reduce
poverty and generate growth.
Part of the challenges that the country has to achieve growth, is to cancel the differences, since
growth has been uneven in terms of population groups and geographical locations.
The proposal of the source consulted is quite interesting: "The world can only eliminate poverty
if India manages to raise its citizens above the poverty line."
The growth in 2019 was 6% and it is expected that by 2020 and 2021 it will reach 6.9%. It is
projected that in 2022 the growth will be 7.2%
From what India represents for the rest of the world, calculate how in the future this economy
will be of great significance to the rest of the countries of the world so much for what this society
can teach as much for its leadership role.
The information in this point B. has mostly been obtained from World Bank Group, 2019.
D. China:
There is some slowdown in economic growth; however, if China took advantage of the
liberalization measures to which it has engaged in trade agreements, it would increase, in the
economic strength of its consumers.
It would be beneficial for China that the economic agreement with the United States be truly as
expected. The commitments are, in general:
USA will withdraw some tariffs.
China will make purchases of American products to which it has committed to, and will promote
greater openness of its domestic markets (especially financial services)
There is some uncertainty regarding issues such as subsidies or technology transfers.
However, this agreement is very hopeful because it is a first step of mutual understanding and a
first step also towards a more definitive commercial agreement.
The author considers that a good measure would be to implement a series of measures that give
greater freedom of access to the market to foreign and private companies.
If the slowdown continues, growth could fall below 6%.
Job creation would give them important maneuverability to generate social stability
Consumption is increasing and this is essential for the long-awaited growth of the economy of
this and any country.
The services sector now accounts for 46.3 percent of total employment.
It is estimated that with a moderate stimulus, China's growth by 2020 will be between 5.5 and
6%.
The incentives for exportations and job creation are pending challenges for China.
China hopes that by 2020 poverty will end.
In 2019, the real estate sector strengthened more than expected, and this is a sign of economic
growth in any country. In the Chinese case, real estate ownership has increased because it is a
good means of protection solid investment.
China has not joined the monetary easing option of most countries; however, through valid tools,
it has tried to provide liquidity to households and make interest rates tend to fall.
The information in this point D. has mostly been obtained from Xu, 2019.
E. South Africa:
South Africa is the second largest economy in Africa; however, it is taking serious risks in terms
of its performance, and its GDP is projected to continue falling.
Additionally, international risk rating agencies would not be very benevolent with the country's
economy, and that would cause even more damage.
The constant political uncertainty and low investment proposal caused the World Bank to reduce
its growth forecast between 2019 and 2021 (for 2019 it was .8%).
The current problems of the country must be added the problems that have electric power, which
in recent times have meant real problems and management errors that have been unable to solve.
There are certain sectored problems that have even generated protests such as mining, among
other sectors.
If no correction measures are taken, South Africa could have a budget deficit of -5.4 to -5.6% of
the GDI
It is also notorious that the country has lower tax revenues than expected.
The corrective plans proposed by the current president include greater access to private
investment, especially in the energy, telecommunications and transportation sectors.
The information in this point E. has mostly been obtained from Smith, 2019.
2. Reasons why BRICS are growing in importance on the international stage.
Hadavi, 2019: “The countries went from less than 20% of the world’s GPD in 2003 to about 30%
10 years later. China and India were growing exponentially, while rising commodity prices kept
Brazil and Russia in good pace to meet O'Neill’s predictions. ” It is an interesting phrase, although
it belongs to another era. A while ago the BRICS countries are not all in the same conditions. In
fact it is considered that China and India continue to be the promise that they have been since the
time when this economic-political bloc was raised, although the other three countries have gone
in the opposite direction.
However, the BRICS are growing in importance on the international stage, in my opinion and
because of what has been investigated, because all the countries that make it up mean an
interesting contribution to the block. For its part, and from the observation itself, I would be
encouraged to say that the amount of emerging population of India and China, the entrenched
leadership of Russia, the regional importance of the largest market in Latin America that is Brazil,
and the richness and novelty of the South African investment give this block a special power.
In the next item (number 3) I talk about his ideological diversity, and the need to amalgamate
goals. And it is that I positively believe that this could be one of the limits of this relationship.
The news of recent years speaks of how the BRICS countries are already entering to political
topics, and not just commercial ones. This is dangerous, and I consider it a high risk, since not
everyone has the same political ideologies or radicalism.
3. Describe internal and external forces that may influence organizacional success as it relates to
these countries.
Therefore, the following items are the most common series of regular external and internal factors
for changes and success of an organization:
External factors: the technical, political, economic, governmental aspects, market competition,
and market reactions regarding this or that product (by necessity or preference).
Internal factors: organizational, structural changes and modifications, process management,
technological changes within the company, reactions to financial circunstances, among others.
All of them are quite directly related to the countries we have been talking about, both as regards
the BRICS as a group, as each one of them. I will try to summarize how some of the most
important aspects are of influence.
The political is perhaps something of the most salient in any case of relationship between
countries as a block: each one of them it obeys one or a syncretism of tendencies, and it is precisely
much of the effort of being a block, being able to amalgamate ideals in the variety of ideologies It
is clear that the BRICS countries have different political criteria, as well as greater or lesser
radicalism in terms of ideologies, and how they the work on that will be, despite of everything,
is going to be the warranty of walking together.
The technical has many different levels of importance in terms of the organizational; however,
staying with the one that is most important in terms of the reality of the BRICS, I would say that
it is the need to have a great capacity to respond quickly and efficiently to changes and
technological advances. In my opinion, India is one of the countries in the bloc that has had the
greatest and best response in this regard, and this is largely part of its development in recent
years.
The governmental aspects vary according to the norms of the governments that affect - positively
or negatively - the organizations. This aspect, being part of the block of countries, is very
important since in it are the regulations, guidelines, policies and everything related to what the
block is based on to carry out its raison d'être. At the same time, the regulations set limits and
establish the ways in which member countries or these should be related to others. Finally, thanks
to this essential aspect of government, a successful and fruitful on the direction and scope of the
group of countries is possible.
I decided to put the aspect of the competition market because, it seems to me, that in this type of
alliances for commercial generation, it is very important to be able to have different types of
actions with respect to the market. For example, the very fact of agglomerating countries with a
large population, and more so if it is about emerging markets. Another interesting fact, knowing
that the offers of the countries of the block are important for the international market, as well as
the management of the relevant knowledge regarding the internal and external market of the
block.
Process management is, in my opinion, another of the very important aspects to be taken into
account for the good management of the strategies of the group of countries, as well as the scope
of their goals, their internal and external communication, their commercial activities, their
Multilateral agreements with other countries or blocks of countries, etc. The knowledge and
implementation of good process management is an essential element for the development of any
entity that brings people together.
4. Discuss the importance of the Saint Leo University core value of responsible stewardship
relative to international business and the rise of these economies.
First, I put the approach made by the University in this regard: “Our Creator blesses us with an
abundance of resources. We foster a spirit of service to employ our resources for University and
community development. We must be resourceful. We must optimize and apply all of the
resources of our community to fulfill Saint Leo University's mission and goals”. (Saint Leo
University).
Analyzing the approach made by the University on the responsible stewardship, based on them
as if the approach of Saint Leo was that of the BRICS block, and extracting what I consider the
essential ideas of this value by the University, would encourage me to say that The responsible
way of doing international business and the rise of these economies would necessarily imply:
A. Resources: the respectable exploitation of the resources that are available in the block. When
talking about resources, I am referring to natural resources and, as the most important, human
resources. I would pay close attention to this last aspect, especially in some of the BRICS countries
that are well known for the shameless exploitation of their citizens.
B. Service: I would focus a lot on the operation and the results of the commercial efforts of the
block in the service to the citizens of the member countries and, much better still, from other
countries that need it. It would be great to make this service an element of development and
improvement of people's living conditions (not only for a political speech, but in the real life).
C. Resourceful: in the sense of creativity, to meet the problematic situations or to develop schemes
that allow efficiency in the development of the activities of the block. Many times this type of
international initiatives in the face of problems or eventualities cease to function or be carried
out, and it is precisely in such situations that the use of resourceful solutions becomes very
important. Likewise when it comes to creating opportunities or taking advantage of existing
opportunities.
D. Meet the goals: which is perhaps one of the most desired challenges by any organization, but
it costs a lot to develop. In this case, that of a block of countries, being goal so deeply related to
people's well-being, the need to succeed is even more delicate.
5. References:
Barua, A. (2020) Much work left to be done [online] The Deloitte Global Economist Network. Available
at: https://www2.deloitte.com/us/en/insights/economy/americas/brazil-economic-outlook.html
[Accessed 7 Feb. 2020].
World Bank Group (2019) Russia Economic Report: Weaker Global Outlook Sharpens Focus on
Domestic Reforms [online] The World Bank Group. Available at:
https://www.worldbank.org/en/country/russia/publication/rer [Accessed 8 Feb. 2020].
Xu, S. (2019) China Bracing for a slowdown [online] The Deloitte Global Economist Network. Available
at: https://www2.deloitte.com/us/en/insights/economy/asia-pacific/china-economic-outlook.html
[Accessed 9 Feb. 2020].
World Bank Group (2019) The World Bank in India [online] The World Bank Group. Available at:
https://www.worldbank.org/en/country/india/overview [Accessed 12 Feb. 2020].
Smith, E. (2019) Facing slowing growth and credit downgrades, South Africa’s economy is stuck in
the mire [online] CNBC. Available at: https://www.cnbc.com/2019/10/10/south-africas-economy-
struggles-as-world-bank-downgrades-forecast.html [Accessed 13 Feb. 2020].
Hadavi, T. (2019) The BRICs were supposed to take over the global economy. What happened?
[online] CNBC. Available at: https://www.cnbc.com/2019/04/11/what-happened-to-brazil-russia-
india-and-china-as-the-brics.html [Accessed 15 Feb. 2020].
Saint Leo University (2020) History, Values, & Catholic Roots [online] Saint Leo University Web Page.
Available at: https://www.saintleo.edu/history-values-catholic-roots [Accessed 19 Feb. 2020].
