BRICS

First initiated by Goldman Sachs as an investment concept in 2001, BRICS (Brazil, Russia, India, China, & South Africa) are gaining economic power and aiming to create a new political and economic order.  To them, the current financial system lead by the World Bank and the International Monetary Fund is out of touch and not suited to support the world’s emerging markets.  BRICS accounts for 30% of world’s territory and 42% of world population.  Four of the BRICS — China, India, Brazil and Russia — are now ranked among the world’s 10 largest economies.

Let’s compare between the US and BRICS economic outputs.  In 2000, the combined GDP of BRICS was only 26% of the US’ GDP.  Thirteen years later in 2013, BRICS’ combined GDP has climbed to 94% of the US’ GDP, with China’s GDP experiences the sharpest increase.  China’s GDP annual growth rate is also highest among the US and other BRICS nations.

The US still commands the highest GDP per capita, whereas China’s is still relatively low.  However, when analyzing the Total Reserves, China stands out for having the fastest increase in total reserves from 2000-2013, and the highest total reserves in 2013 (6 times more than that of the US).  The huge total reserves not only can buffer China from drastic economic upheavals, but also provide tremendous economic power.  

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With the launch of BRICS’ New Development Bank (NDB) headquartered in Shanghai, I can’t wait to see the sibling rivalry of the World Bank, the International Monetary Fund, and the NDB.