The BRICS economic success formula will continue to be imitated by aspiring economies in the developing world and particularly in Africa!
The term ‘The BRICS’ was first quoted in Goldman Sachs report which was published in 2001, this term is an acronym for the emerging developing countries which are Brazil, Russia, India, China and South Africa (Wilson & Purushothaman, 2003, p. 2). In the last decade, these countries have been successful in the global economy and many developing countries across the world, predominately Africa are trying to emulate this success. The essay will show a brief overview of how successful the BRICS have become, once these reasons are established, the essay will focus on the core part of the question which is providing evidence showing how the developing world but in particular Africa are imitating the success of the BRICS. Finally the essay will finish with a conclusion which will summarise the main points which have been explained and discussed throughout the essay.
The BRICS have been successful in the last decade, but forecasters believe that by 2050, the BRICs could become a very important source of new global spending and by the year 2032 Japan’s economy would become smaller that India’s and USA’s economy could shrink below China’s economy by the year 2041. If the BRICS combined their economies together, it would be larger than the G6 (Japan, United Kingdom, Germany, France, Italy, United States) by the 2039 (Wilson & Purushothaman, 2003, p. 3). Originally the term was the BRIC, however in December 24th 2010, South Africa were formally invited to join the global powerhouses to create the ‘BRICS’ (Seria, 2010). Research which was undertaken by the International Monetary Fund (IMF) has given statistics which show by the year 2014, the BRICS will have contributed at least 60% to the world growth (Hervieu, 2011).
Many believe certain characteristics are behind the BRICS success and they are demographic, growth factors and the unique advantage the country obtains. Firstly looking at the demographics of these global economies, the major reason will be the size of the economy, with the combined total economic output share rising by 6% from the year 2000 to 2008 (Sherpa, 2011). The rise of the middle class especially in countries such as India and China has led to output to increase causing consumption in the economy to rise due to higher disposable income which has been caused by the creation of jobs (Sherpa, 2011, p. 2).
The growth rate of these economies is an influential reason behind the BRICS success, as seen in the second paragraph the BRICS are growing quicker than the G6 group and this is due to a large source of labour. Combining the BRICS population together, the proportion of the world population would be a staggering 42% (Fubin, 2011), this large labour force are able to cope with the worlds demand and most importantly is a lot cheaper which is favourable with outsourcing companies. In 2011, Foreign Direct Investment in the countries India and China rose by 31% and 8% respectively and South America as a whole had an increase of 27% (UNCTAD, 2012), this allows these economies to increase focus on innovation such as new products or services, this can come through research and development and since 2002 India, China and Brazil have doubled the share of investment used on research and science by 7% to 24% by 2007 (Sherpa, 2011).
Finally the BRICS have all got a unique advantage which helps them become more attractive on a global scale which helped boost globalisation and trade. Brazil has many commodities and crude oil that help boost trade such as iron ore with a company in the Rio de Janeiro having a 31% worldwide export share of ore which is the largest in the world (Bloomberg, 2012), along with Russia having a large reserve of crude oil it also has advanced technology which gives the country and edge on the global market. As mentioned above in the essay India have thrived from its English speaking population with companies outsourcing its telecoms to India whereas China have experienced a rise in the production of goods through companies such as Apple outsourcing its work to China due the labour being cheap (Urp, 2010, p. 2). Last but not least South Africa posses the links into northern Africa which is very vital and commodities and services such as banking which can be used to trade.
Figure 1 Figure 2
Source: The World Bank Group (WBG, 2012) Source: Google Public Data (OCED, 2012)
Figure 1 and 2 above show the Annual Gross Domestic Product (GDP) Growth for the BRICS in the last decade, the graph show the success that these BRICS have obtained giving reasons for developing countries wanting to imitate this success. Since 2003, the BRICS have been above or just around the 5% mark whereas the world as a whole have only been 4% or below. With the global economic crisis hitting all the countries across the globe in 2009, it can be seen from figure 1 and 2 that the GDP falls not just for the BRICS but for the rest of the world with Russia being affected the worse with the GDP becoming -7.9% (OCED, 2012) however the strength of the BRICS economies has led to immediate increase in 2010 with all the countries have GDP growth of above 2.5% where as the worlds GDP growth became 4% however has started to decline in 2011 (WBG, 2012).
The success of the BRICS has been admired by many countries, especially developing economies which have been identified in the Goldman Sachs report which states that eight of the next eleven emerging economies are developing. These countries include Indonesia, Egypt, Nigeria, Pakistan, Vietnam, Bangladesh, Iran and Turkey (Haq, 2012). Size of these populations, are the reason for its future success with these economies, next to the BRICS and the US, have the next largest populations (Wilson & Stupnytska, 2007, p. 2). By using an economic indicator called Growth Environment Score which within this indicator includes 13 variables such as inflation and education shows by index points how these countries are performing and if the economies have been successful (Haq, 2012).
Figure 3
GES for the BRICS and N-11 Figure 4 Source for both graphs: World Bank (Ahmed, 2007, pp. 13-16)
Looking at figure 3 Vietnam, Iran, and Turkey are achieving success with these countries obtaining index’s above 4 which shows that in current economic times these economies are being successful. While figure 4 shows that in the long run most of the emerging economies will improve and become successful future (Ahmed, 2007, p. 16). Vietnam have been the stand out economy out the eight economies, with the country’s economy being able to obtain similar GDP growth rate to China, India and Russia in the last five years this shows that even emerging economies have been able t o be as successful as the BRICS. Also in these same 5 years the some of the developing economies have been able to achieve 5% growth rate or more on average (Wilson & Stupnytska, 2007, p. 2). looking at economic indicators gives a good idea if an economy has been successful so by these economies being able to reduce the inflation level, and becoming more open to trade Egypt, Iran and in particular Vietnam shows that developing economies are on the rise, with Vietnam having been able to imitate the success of the BRICS with the economy having a share of trade in GDP increasing by 35 points since the year 2000 this has led to current accounts in the developing world to become surpluses (Wilson & Stupnytska, 2007, p. 6)
Africa as a continent is on the rise, following the introduction of South Africa into the BRICS in 2010, over the last decade North Africa has also been slowly improving its economy and experiencing a great deal of success (The Economist, 2011). A report conducted by the IMF showed Africa has imitated the success by having seven of its countries included in the 10 fastest growing economies with all of them experiencing a yearly growth rate of 8% or more as seen in figure 5.
Figure 5

Source: The Economist (TheEconomistOnline, 2011)
Not only is Africa achieving success in the present is predicted to have more success in the future as seen in the graph above in the next 3 years, African countries are expected to overtake Asian countries with the IMF predicting that seven countries will be in the top 10 by the end of 2015 (TheEconomistOnline, 2011).As mentioned for the BRICS before, the reason of their success has been because of its rising middle class, this same success has now taken place in Africa, where India has now got less middle class consumers than Africa, and by 2030 consumer expenditure is predicted to rise to $2.2trillion a year (Rensburg, 2012).
An influential factor behind Africa’s success is the way Africa has now moved forward with time especially with technology and infrastructure. The transfer of information from Africa to the rest of the world has become easier due the building of the Eastern Africa Submarine Cable System; this new infrastructure allows the rest of the world to connect with 21 countries within the African continent, this enhances broadband connections within the continent (Rensburg, 2012). This has led to investment from the globe to increase, as in 2000; FDI was only $9 billion whereas in 2008 the figure rose by a staggering $53 billion. This increase can now be used to help invest into the economy creating more jobs and producing textiles and increase its tourism; this size of this success can be put in to words by saying the figure was nearly as big as China’s FDI inflow (Leke, et al., 2010).
However, both the BRICS and the developing economies haven’t enjoyed success all the time, with reports this year claiming that the BRICS are starting to falter; firstly growth has been below predictions with India now reducing it forecast this year by 1%, and with China being below its predicted result for the first time in eight years (Voigt, 2012). Recent statistics have shown the African continent imitating success achieved by the BRICS, however in the last couple of years, there has been many political issues in countries such as Libya and Egypt, this has dampened the success achieved in Africa, this shown with tourism in Egypt, which used to be very popular, has now fallen with revenue decreasing by $2.5billion and a reduction in visitors with a 32% decrease (Shenker, 2012).
The BRICS are made up of 5 countries which in recent times have enjoyed success in the global economy with GDP growth continuing to rise, this success endured is envied by countries such as USA and UK, however many countries across the globe have tried to imitate this success however on a smaller scale. Along with the economies in the N-11, this success has been tried to be emulated in Africa, where in recent times, countries in Africa have endured some success and this was shown throughout the essay with not just quantitative data but alongside qualitative data. But as seen in the recent times the BRICS have struggled to achieve success, showing that this formula might not be sustainable, so the question for the aspiring developing countries and in particular Africa, is how long will the success achieved from their economies last for.