The acronym was coined in 2001 by Jim O'Neill from investment bank Goldman Sachs in a paper entitled ‘Building Better Global Economic’. Basically this organization expecting that coming 2050 these countries could become much large force in the world economy and .By 2025 they could account for over half the size of the G-6 (US, Japan, UK, Germany, France and Italy). Since its inception, the BRICS has expanded its activities in two main streams of work: (i) coordination in meetings and international organization; and (ii) the development of an agenda for multisectorial cooperation among its members.
The BRICs organization might shape the world economy the BRICS bank with an authorised capital of $100 billion (about Rs 600,000 crore) as well as a separate contingency reserve arrangement of $100 billion, created jointly by Brazil, Russia, India, China and South Africa could mark a profound shift in the way global finance and politics might operate in the years ahead. BRICS countries demand and consumption are very high as we know that the total population of all BRIC states amounted to an estimated 3.0 billion inhabitants (2014). BRICS as a future has become engine of new demand growth and spending in the economy. Goldman Sachs says that higher growth may lead to higher returns and increased demand for capital. No doubt that after Modi came to power the sentiment of Indian business absolutely changes many countries wants to invest in India because of demand. So that, FDI flow in India increase 29% in 2016. And Russia’s investment through Rosneft it bought stake in Essar Oil largest FDI deal around $13billion come to India. Capital flows might move further in their favour, prompting major currency realignments. Another point of Goldman about the BRICS nations that rising incomes may see in the BRICS countries’ economies move through the ‘sweet spot’ of growth. Recently government of India increased the salary of government employee in 7th pay commission around government recommended 23.55% allowances and pensions. This money increases the purchasing power of Indians.
Goldman Sachs expecting as advanced economies become a shrinking part of the world economy but demand will increase in the emerging markets. When advanced economies feel doubt of progress their investments moved into the emerging markets. In 2050 the scenario of world economies totally different emerging economies will dictate the world. India’s economy, for instance, could be larger than Japan’s by 2032, and China’s larger than the US by 2041. The BRICS economies taken together could be larger than the G6 by 2039. In his dream demography will play the crucial role India is the best suited demography in the eye of Goldman Sachs. If we see the history back 30 or 50 years illustrates that point Japan and Germany were struggling to emerge from reconstruction. Thirty years ago, Korea was just beginning to emerge from its position as a low-income nation. And even over the last decade, China’s importance to the world economy has increased substantially. Now India ‘catch up’ the path of development. Next 50 years Goldman expecting that China, Brazil and Russia will slow but India will maintain its growth. India has potential to raise its US dollar income per capita in 2050 to 35 time’s current levels. What would be the condition of best like any nation’s legal system, functioning markets, health programme, education systems, financial institutions, the government bureaucracy, and definitely openness, means how you encourage FDI and reform in the country. These factors definitely affect the future road map of any nation’s development. The BRICS countries are collectively the largest market in the world, and their cumulative GDP has more than tripled in the last 10 years. Now days, the eighth summit of BRICS nations has kicked off in Goa. Amid the turbulent geopolitical situation in the world, India, as the current BRICS chairman, is hosting under the slogan “Building Responsive, Inclusive and Collective Solutions.” Future prospect is no doubt very shining but some global problems can disrupt his agenda such as global terrorism, drug dealing and corruption. PM Modi without naming any country described Pakistan is a mother ship of terrorism. Mr. Modi very conscious about neighbour sponsor terrorism can disrupt the India’s developmental agenda. But China all weather friend of Pakistan not admit that Pakistan is a terror sponsor country it may be has own assumption. Even China also affected by terrorism its western part “Xinjiang” very much affected.
Views expressed are of the author and do not necessarily reflect the views of FORE INDIA.