The Impact of Globalisation on BRIC Economises - Literature review Example

 The Impact of Globalisation on BRIC Economises BRIC economies are considered the largest market economies with a rapid growth, and accounts for more than three billion people, who are slightly under half of the total population in the world. These countries have made a substantial contribution to the growth in the world GDP, in fact, numerous economist have developed projects indicating that china is likely to become the largest economy in the world (Anderlini, 2011, 1). In addition, by 2050, China will have one of the most significant economies, and making America fall back from its current position (Canrong, 2011, 1). Therefore, BRIC is expected to bring forth changes in the list of the greatest world economies in the near future. On the other hand, BRIC economies are not similar, though they are in the investment classification, whereby others having political and economic alliances, which are from the groups. Nevertheless, among these countries, China has made significant achievement, thereby making them eliminate the need for alliances. BRIC has made a significant effort in conversion of the growing economic influence into a political power, through summits comprising of analysts (The State University of New York, 2011, 1). In this case, the analyst work together in the BRIC countries in order to establish a future economic partnersip in these countries, whereby China will dominate in manufactured goods, provision of services is dominated by India while the field of material supply is dominated by Russia and Brazil (EconomyWatch, 2010, 1). Globalisation has been attributed to the acceleration of international economic integration, which has been unexpected in numerous ways. However, there are expectations that this might contribute to the vulnerability of workers in BRIC economies. There are resenting developments in the world concerning the increased importance of emerging economies, for instance, China has become a large exporter, whereby it has raised its reputation in international production networks entailing off shore business. Therefore, globalisation has enabled these countries to work together in order to counter well-established interests and organizational structures. The relationship between America and Europe has been substantial in facilitating the developments between the BRIC countries. Globalization in BRIC countries that are attributed to integration with the inputs, finished goods and services, which are underscored by increased business transactions in the world trade. In fact, the ratio of trade-to –trade GDP and the shares of the value addition by the exporters has fostered a uniform development in the wide range of various economies in the world. There are factors that are specific to each country or region, and they have an influence to domestic and trade reforms in BRIC countries, since these countries has made a significant expansion of their exports, thus contributing to the development of their economies (European Commission, 2009, 1). In addition, this has a significant distinction of the BRIC to other countries in the world; for example, China’s performance has been in accordance to the perceptions of the pubic in other countries that have been attributed to the same economic performance, such as India, Russia and Indonesia. Globalization in the BRIC economies has made a significant contribution to the creation of opportunities for investors, whereby the multinationals in the world are targeting these countries, with the objectives of exploiting their markets (Dranitsyna, 2007, 1). For instance, in China, the General Motors made higher sales compared to America, in 2010, and there are expectations that China will become the world’s largest market for aviation and luxurious goods. In fact, BRIC countries have eliminated competition concerning growth and incremental consumption with other countries in the future. Moreover, globalization has caused a shift in the global consumption towards the emerging economies, which is associated to the realignment of political power, whereby making an analysis of the debate more cohesive in these countries as a political and economic bloc for examining the approach to multilateralism (OECD, 2009, 3). On the other hand, globalization has caused a strained bilateral relationship resulting to decreased level of investment in the BRIC countries.. Moreover, financing to the multilateral inventiveness has not been allocated significant resources in BRIC countries since they have non-BRIC countries as trading partners (Lukyanov, 2011, 1). In fact, globalization is creating the difficulty in collaboration among the BRIC in relation to energy policy since a country as Russia and Brazil is a leading supplier, and China and India are consumers. Additionally, globalisation in BRIC has influenced their differentiated priorities leading to competition for investment and accessibility to market since these countries share commitments to the sovereignty of the state and multipolar world, without domination. Globalisation has facilitated integration in BRIC counties into world economies resulting to anxieties among workers in OECD. In fact, these countries make a forty-five percent contribution of the world’s labour supply compared to the contribution of twenty percent made by OECD countries (OECD, 2007, 2). Moreover, trade and investment in BRIC countries has increased due to globalization for the last fifteen years, leading to a significant growth in trade as a proportion of the GDP of fifty percent in a country like Russia and a doubling growth in China, Brazil and India. In fact, there is a standard trade theory that implies that the development contributes to growth of job insecurity or a reduction on wages for the low-skilled workers in OECD countries, while the consumers are offered lower prices (Global Sherpa, 2012, 1). Globalization has contributed to a reduction on wages and degradation of the working conditions for employees in BRIC counties, since the average growth in wages has not kept pace with the growth of the labour productivity, despite the rapid growth in trade and FDI. Moreover, a consistence bargaining power reduction has been caused by globalization, and other factor that has contributed to the decrease in share of wages. Consequently, various firms in BRIC have decided to adopt the progressive capital-intensive technology in this period such as deepening of capital that can result to a decline in the share of wages and absence of declined bargaining power of workers. References Anderlini, J. (2011). China cements role as top of the Brics. Asia-Pacific. Retrieved on November 26 2012 from Canrong, J. (2011). The Essence of the Rise of BRICS and Its Future. China & US focus: Slider. Retrieved on 26 November 2012 from Dranitsyna, Y. (2007). BRIC Economies Appeal to Investors. The St. Petersburg Times. Retrieved on 26 November 2012 from EconomyWatch. (2010).The BRIC Countries: Brazil, Russia, India, China. Economics: International Organizations. Retrieved on 26 November 2012 from European Commision. (2009). Emerging Economies (BRIC Countries) and Innovation. PRO INNO Europe. Retrieved on 26 November 2012 from Global Sherpa. (2012). BRIC Countries – Background, Latest News, Statistics and Original Articles. Retrieved on 26 November 2012 from Lukyanov, F.(2011). Is BRICS the start of a new world order? Russia & India Report. Retrieved on November 26 2012 from   Organisation for Economic Co-operation and Development (OECD). (2009). Globalisation and Emerging Economies. Policy Brief. Retrieved on 26 November 2012 from Organisation for Economic Co-operation and Development (OECD). (2007). Organisation for Economic Co-operation and Development. Policy Brief. Retrieved on 26 November 2012 from The State University of New York. (2011). BRICS: The New World Powers. Globalisation 101. Retrieved on 26 November 2012 from Read More