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RISE OF BRIC

Bridwater, Rasheed & Sharmeen

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Agenda

Shaping of the Economy

Population/Financial Growth

Political Landscaping

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1.72.7

4.3

6.9

9.3

0

2

4

6

8

10

U.S Brazil Russia India China

GDP Growth Rate

2011

299 352497 537

3254

0

500

1000

1500

2000

2500

3000

3500

India Brazil Russia U.S China

Reserves Amount in U.S$ Bn

2011

GDP Growth And Reserves

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FDI Growth

BRIC FDI inflows decrease

(2009-2010 global investigation)

China- low-value manufacturing base became lesscompetitive , stringent restrictions, corruption, red

tape and general business-unfriendliness prevail.

India- poor business backdrop, restrictions on foreignparticipation in many sectors, slow reform and the lackof commodities

Brazil- poor record on property rights, political influenceon the judiciary and corruption.

Russia- has no freedom in emerging markets and atrack record of high-profile expropriations.

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FDI Growth

BRIC FDI Raised back 2011-2012

FDI in China reached 116.1 billion by 2011.

FDI in India rise its lowest 1.6billion in 1990 to 46 billionin 2011-2012. Projected to an increase of 60billion by2013.

Current news (Oct 2012)

India's government has approved 49% foreign directinvestment in insurance companies and opened thepension sector to foreign investors

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FDI Growth

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Exports/Imports

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0.90

1.4

0.5

0 0.5 1 1.5

BrazilRussia

India

China

Annual Population Growth Rate

2011

Population

China most populous country in the world

India on 2nd, Brazil on 5th, and Russia on 9th

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0 5 10 15 20 25 30

Brazil

Russia

India

China

2030

2010

Percentage Of People Aged60 and Older

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Labor Force

Brazils Unemployment Rate: 5.3%

Russias Unemployment Rate: 5.4%

Indias Unemployment Rate: 3.8%

Chinas Unemployment Rate: 4.1%

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Military spending (Defense)

BRICs combined expenditure of nearly 13% to the global defense

expenditure

Brazil-

Buying modern all military equipment from France and Britishindustry.

Especially the submarines that are capable of carrying longrange missiles.

Spending 34 Billion USD as of 2010.

Russia- Transforming and resuscitating the military power.

Building new vessels that are capable of launching nuclearweapons (authorized by Nuclear Proliferation Treaty (NPT).

Spending 59 billion USD as of 2010.

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Military spending (Defense)

India-

The highest growth rate in terms of population and man power fitfor service in military.

Capability of Nuclear weapons (without NPT agreement), draws

a great attention from the world China-

Having the highest population.

Provides the largest military including man power fit for service.

Highest military expenditure of all , nearly 120 Billion USD per

year.

United States, the Largest military equipment exporter, includingsales of military equipment to all four of the BRIC nations.

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0

5,000

10,000

15,000

20,000

2000 2001 2002 2003 2004 2005 2006 2007 2008

China

U.SRussia

Education

Two third of the foreign students in U.S are from China and India .

In Bachelor degree(Engineering &Science) China has ten time more

growth than U.S

Doctoral degrees in engineering, by selected country/economy:200008

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R&D Spending And Growth

China ranks 2nd in R&D spending ,149 billion in 2010

with 22% annual growth

India performed $32 billion of R&D in 2010 with 9%annual growth

Brazil performed $23 billion in 2010

Russia performed $22 billion in 2010

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Consumer Spending/ Saving Rate

Two opposite pattern :

China-India: low spend and high saving.

Brazil-Russia: high spend and low saving.

Chinese saving rate 31% of income, where Brazilian

saving rate 10% of income.

Chinese and Indian spending rate 23% of income, where

Brazilian and Russian spending 34% of income.

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Corruption

Brazil government embezzled public funds to

support political campaigns

Everything in Russia is for sale

Political awards contracts for business deals

Doing business in China often requires bribes

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Challenges

Volatile markets

Unstable economies.

Export driven economies

Weak infrastructure

Energy concerns

Shortage of skilled workers in certain areas

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Questions