BRIC Countries – Overview

The term BRIC is a short form of Brazil, Russia, India and China. There is so much discussion about BRIC countries that I thought we should take a general look at what BRIC countries mean in the world of investments.

The economies of the world have experienced many bumps and turbulence in the recent past. This is the main reason why the BRIC countries are gaining importance in the eyes of investors all over the world. Reducing internal economic growth rates, reducing domestic demand, and falling markets have created major threats to the survival of global investors as they look for new ways to invest their money to ensure a good return on capital as well as the safety of their capital.

BRIC definition:

Jim O’Neill of Goldman Sachs Head of Global Economic Research created this BRIC acronym for Brazil, Russia, India and China. He first identified the BRIC countries in his report on emerging markets in 2001.

What makes BRIC countries different from other economies:

According to the Jim O’Neill BRIC report, the combined economic wealth of these four countries will be more than that of the richest nations by 2050. As of today, these four countries combined will make up about 40% of the world’s population and about 25% of the world’s land. This optimistic scenario will provide better growth as well as security for investors.

*Brazil is the fifth most populous country in the world and the ninth highest GDP in the world.

* Russia ranks seventh in most GDP.

* India is the second most populous country in the world and the fourth highest in GDP.

* China is the most densely populated country in the world and the second highest gross domestic product. The first place is the United States.

According to a Goldman Sach report, these four countries will achieve sustainable growth over the next 40 years that will overtake European countries in terms of economic growth.

We have seen many ups and downs in global economies due to the credit crunch and various bubbles created through improper business practices. Emerging markets have become a paradise for global investors due to their realistic and somewhat conservative growth policies.

The BRIC countries offer a high level of economic growth with a sustainable rate of economic activity that is estimated to continue for several decades to come. Due to the turbulent global market scenario, the investors are attracted to the BRIC countries due to the high rate of return on investment as well as the high expected capital.

As a global investor, one cannot ignore the growth potential of these countries and any investment in these countries will ensure better portfolio performance. This diverted the attention of most global investors from Western countries to the BRIC countries. This global interest will once again help these countries to harness their resources in an optimal way and will make these markets more competitive ensuring more transparency in market operations.

The chain’s impact will last for at least the next 3-4 decades and these countries will become a focal point for global investors to invest.

In short I can say that as a global investor you cannot ignore the importance of the countries of the BRIC group and you can compare these countries among themselves to see which one is better to invest to improve your investment portfolio.