The BRICS Alliance in the Globe - Example

Name: Institution: Date: Table of Contents Table of Contents 2 Abstract 4 1.0 Introduction 5 2.0 Overall BRICS Impacts 7 2.1 World Economy 7 2.2 Social 9 2.3 Environment 10 2.4 Political 11 3.0 BRICS Members Role 11 3.1 Brazil 11 3.2 Russia 12 3.3 India 12 3.4 China 13 3.5 South Africa 14 4.0 Importance for Each Country 14 4.1 Strength 14 4.1.1 Brazil 14 4.1.2 Russia 14 4.1.3 India 15 4.1.4 China 15 4.1.5 South Africa 15 4.2 Weakness 15 4.2.1 Brazil 15 4.2.2 Russia 16 4.2.3 India 16 4.2.4 China 17 4.2.5 South Africa 17 5.0 Statement of BRICS 18 5.1 Vision 18 5.2 Mission 18 5.3 Strategy 19 6.0 Conclusion 20 References 22 Abstract Changing global geopolitical dynamics necessitate a research to project on the changing dynamics implications both in the present and into the future. This can be historically derived from the enormous political social and economic changes with the decline in socialism and rise of the western capitalism production ideology. Currently, the BRICS alliance, a six membership economic group between Brazil, Russia, India, China and South Africa is among the most advancing regional blocs besides the EU. This research offers a strategic evaluation of the bloc global influence, the contributions of each member, a strength and weakness analysis of each as well as a future expectations forecast on the bloc operations and progress. 1.0 Introduction Macroeconomic factor change in the global market platform has influenced and changes the structures and approaches through which the international market operates. Traditionally, the global market was basically grouped into two major segments namely the developed and the developing markets. On one hand, the developed economies especially in Europe and USA were the main products manufacturers and producers. On the other hand, the developing nations served as the markets for the produced goods. In this case, the developed nations acquired the raw materials form the developing nations and later exported produced goods to these nations. The graphs below illustrate the overall GDP and export imports growth comparison between the BRICS nations with other regional blocs such as the UAE. However, this market topography has gradually changed in the market. This is especially with the emergence of new trade blocs in the market. One of such characteristics regional trade bloc changing the global landscape in the market as Oneil (2001) described is the BRICS an alliance between Brazil, Russia, India, China and South Africa. The emergence of this trading bloc has gradually enhanced and facilitated increased effort to offsetting the balance of trade deficit in the developing nations. Besides the establishment of an imports exports balance in the region, the bloc has additionally provided a social and political development platform for its stakeholders a move forecasted to change the global geopolitical nature into the future. Based on these arguments, this evaluation paper evaluates the specific BRICS members’ contributions as well as the strengths and weaknesses exhibited by each of the members. 2.0 Overall BRICS Impacts 2.1 World Economy One of the fundamental areas in which the BRICS bloc alliance is influencing the global economy is through its economic growth development prospects in the market. On one hand, the BRICS report developed by the Oxford University Press (2012) stated that the bloc has a 25% by value total GDP in the world, which depicts is potential economic power as shown below. . Moreover, the bloc has increased its influence and control on the African markets. In this regard, as Moghadam (2011) argued, through its main member’s China, the bloc has initiated bilateral and multilateral agreements with the African nations on trade aspects especially on acquisition of raw materials. Consequently, statistics indicate that the total trade value of the BRICS is at half the trade value of Europe and USA combined in Africa as demonstrated by the graph on increasing trade dominance by the bloc (“The European Parliament”, 2013). 2.2 Social Socially, the bloc has facilitated increased changes in the market. The BRICS nations have a shared characteristic of their high populations. In this case, traditionally, the nations were characterized with poor and low living standards. However, this aspect has changed and revolutionized over the years. On one hand, the nations through joined relations and collaborations have established proper economic development rate expected to rise and project into the future. Therefore, this as Reissen (2013) illustrated has over the years enhanced increased living standards in the nation. Moreover, socially, the nation bloc has expanded its social influence onto the African nations. In this regard, its initiated social political relations ensure increased earnings, per capita income and eventually improved living standards in the continent. Thus, this evidences the argument that the bloc has exerted social influence both within and outside its membership. Increased exports as demonstrated below indicate increased income inflows into the market. 2.3 Environment A major global development challenge is environmental changes. Over the years, the globe has experienced increased concerns of the drastically changing environmental aspects across the globe. In this regard, issues on global warming and the future potential implications have dominated the international policy making platforms as evidenced by the past climate change conferences. In this case, the BRICS members have a strategic control and influence on these changes and have often been attributed with increased climate change. For instance, China carbon emissions have been on the rise over the last decade despite the global nation’s efforts to control and mitigate against such emissions that have a direct impact on global warming. In this regard, it is apparent that despite the global efforts to control climate change, the BRICS bloc is yet to develop internal policies and systems such as the G20 summits of which Wacker (2013) argued that China has considerable influence, through which to regulate members’ contribution to overall climate change control policies thus resulting to increased global environmental pollution with increased production efforts. 2.4 Political A political analysis on the impacts of the BRICS bloc exhibits increased overall implications on the political front. On one hand are the perceived future changes in the geopolitical aspects across the globe. In this regard, The Daily Telegraph article by a renowned diplomat Yakovenco (2013) analyses assert that the bloc will into the future form an alternative political bloc for the emerging and developing nations as a competitor and alternative to the USA and the EU political blocs’ global supremacy. Moreover, mutual support between the stakeholders among the members has facilitated and ensured increased political democracy development into the future. 3.0 BRICS Members Role 3.1 Brazil Brazil is one of the key BRICS nation’s members. On its part, Brazil has a strategic location merit. In this regard, due to its proximity to the GMT, the flight time between its capital to New York in the USA and London UK in Europe is almost equal. Therefore, it provides the bloc with a central location to access both the USA and European markets. In addition, the nation has a wide wealth of natural resources (Song-yi, 2013). As such, other members in the bloc rely on importing these raw materials at reduced tariffs for their manufacturing and production needs. Thus, the nation’s key contribution is its strategic location and vast natural resources. 3.2 Russia Russia is a key political kingpin in the region. In particular, the nation yields much control and influence on the former communist nations in the region that use Russian as their key languages in the region. Its main influence is on nations forming the Independent Commonwealth States (ICS). In this regard, the political influence by the nation offers the bloc political control and dominance in the region. Additionally, Song-yi (2013) in n evaluation of the bloc market entry strategies stated that the nation has vast oil mines. As such, it powers the bloc partners with reliable and affordable energy to facilitate economic projects and development. This in particular forms the key national contribution and role in the bloc. 3.3 India The Indian market is characterized by its high population only second to the Chinese population in the bloc. In this regard, the nation offers the bloc two strategic contributions. On one hand, it provides readily available and affordable labourforce. As such, the nation offers the bloc with the required labor supply at low costs to stimulate development. Consequently, due to its contribution, the nation has ensured low production costs in the bloc against the rising labor and overall production costs in the developed nations market (“The BRICS Post”, 2012). On the other hand, the nation offers a strategic consumer base for the established and produced goods in the region thus ensuring sufficiency and sustainability of a complete production chain in the market. The population growth and structure is demonstrated in the graph below. 3.4 China This is the largest nation in the bloc with the largest GDP values among all other members in the bloc. In this regard, the nation offers the bloc a stable production base in the market. Through this approach, the nation with its strong and well established infrastructure offers the bloc with the desired and required production needs economically (“The BRICS Post”, 2012). Moreover, the nations influence in Africa offers the bloc an increased opportunity to exert influence and control on the African market expected to project and emerge into the future as demonstrated below. 3.5 South Africa The South African is the smallest nation economically in the bloc. Although the nation offers minimal contribution to the bloc economically, it offers a political influence in Africa. In this case, although the bloc insists that the nation is not a representative of the African nations, it offers a significant bloc influence in the continent. In this case, being the most advanced economy in the south Saharan Region, the nations offers a strategic avenue and entry point through which the bloc can adopt to exert its influence and policies in the African market. As such, the geographic location of the nation offers a supplement of Chinas Africa influence strategy, forming the main cause of Chinas invitation of the nation to the bloc. 4.0 Importance for Each Country 4.1 Strength 4.1.1 Brazil The Brazilian nation key comparative edge is the presence of diverse and a rich natural resource base. In this case, the nation relies on these natural resources exportation in the market to earn increased foreign currencies. Moreover, the rich national cultural diversity and the unity among the various cultures has enables the nation develop relatively strategic viable policies such as the evidenced relevant taxation systems. 4.1.2 Russia The Russian nation key competitive edge is its oil reserves. In this regard, the rich oil reserves in the market offers the nation a strategic opportunity to advance and progress it’s economic and GDP growth into the future through increased exportation that boasts its terms of trade in the market. Additionally, the national geopolitical influences in the region offer it an added trade relations advantage in the regional market. 4.1.3 India The Indian nation as already discussed has a high population base. Therefore, this ensures that all the domestic produces and manufacturers in the nation acquire a ready domestic market in the nation. As such, through increased domestic consumption as well as the existence of accommodative foreign investment policies as argued by Scroote (2011), the nation develops a strong economic base in the market allowing for continued economic development in the market. 4.1.4 China The Chinese nation key competitive edge and strength is derived from the merger between the socialism and capitalism in its development model in the market. In this regard, the nation has built a strong infrastructural platform in the market allowing for increased economic activities and factors development (Chowdhury, 2014). 4.1.5 South Africa The key strength in the South Saharan nation is its growing middle level income earners in the market. In this regard, The Economist (2013) explained that the relative income earners in the society provide the market with a strong local and domestic market through which the GDP though mild has developed and grown over the years. 4.2 Weakness 4.2.1 Brazil A major limitation and challenge in Brazilian market is the national poor infrastructure. Despite the fact that the nation has strong natural resources, it lacks the relevant structures and support services to facilitate value addition processes on the national resources thus reducing the value of exported national resources and thus leading to an imbalance of payment on the nation. 4.2.2 Russia Although the Russian nation has vast oil wealth it has major challenge on policies development. In this regard, the Russian nation is gradually emerging from the socialism structures to the current capitalism state. However, this evolution has faced a series of challenges from within the national political affiliations, a challenge that has reduced the overall growth rates in the nation reducing its competitive edge to the lowest in the bloc of 0.15. 4.2.3 India The Indian nation has its major challenge on social inequalities. In this regard, although having a high population and large labourforce, the overall national earnings are unequally distributed in the nation. As such, the nation has a large and widening gap between the rich and the poor thus negating and limiting social developments in the market. 4.2.4 China The Chinese market key weakness is the perceived future cost of production. In this regard, the nation has over the years relied on the low costs of production to increase its production and products supply in the global market. However, as Prasad (2011) study statistical analysis reviews indicate that the cost of production will rise and equal that of the USA by 2020. As such, this risks the nation competitive edge failure (Mpoyi, 2012). 4.2.5 South Africa As Korgeny and Muller (2013) stated, South Africa has its main weakness in a low GDP value and growth levels. Statistics indicate that the nation has over the years since its admission onto the bloc registered the lowest GDP growth rates. Therefore, this lowers its potential and ability to cope with the global and bloc peers development. As such, this limits the national ability to advance the bloc vision. The low GDP growth rate can be empirically evidenced by the nations low export values that are the least in the bloc. 5.0 Statement of BRICS 5.1 Vision The BRICS overall vision is the creation of an economically developed bloc into the future. In this regard, the bloc is oriented and focused on the ultimate development and evolution of the overall member states economic status in the market. Although challenged by critics such as Stuenkel (2012) that the bloc lacks a common genuine vision, the blocs’ vision statement has established strategic expansion criteria to expand and enlarge into the future. In this case, the vision is geared towards the establishment of bilateral corporations as well as geopolitical alliances in the region to allow for political developments in the market. 5.2 Mission The bloc has over the years applied the participatory approach as its main mission. In this regard, the BRICS bloc has established a platform in which the respective nations in the market have a responsibility. In this case, the nations have specific are of operations and mandate of ensuring the developed vision success. As such, regular summits and experts forums have been conducted in the member states on a rotating basis as a stock taking approach as well as the approach to defining future development aspects into the future. Beausang (2012) stated that one of the key mission approaches through which the BRICS bloc operates is through its flexible and informal structure. In this regard, the bloc has ensured that the mandate of the bloc s flexible and changing ensuring that the bloc incorporates the interests of the emerging global issues and aspects across the market. 5.3 Strategy Strategically, Saran Singh and Sharan (2013) stated that the BRICS bloc has a definite large and promising future in the global society context. On one hand, statistical forecasts indicate that by 2050, the BRICS will be among the seven largest super powers in the market as illustrated below a move that the PWC (2013) report argues that the Chine market could exceed the USA market by PPP value by 2017. Moreover, it is estimated and argued that the bloc will emerge as an alternative super power politically into the future, bound to challenge the USA political superiority in the globe. Further, the bloc is expected to expand its membership into the future to increase its overall influence. In this case, Borodaevskiy (2013) in an article on the Japan Times paper although raising issues of concern, stated that besides the inclusion of additional African nations, Japan ranks among the most potential entrants into the bloc in the future with the rising expansion potential into the future control on the global international business. 6.0 Conclusion In summary, this evaluation research develops a strategic critical review of the BRICS alliance in the globe. In this regard, the research establishes that the bloc is an economic alliance aimed at developing and improving the members’ states economic performance through pooling together resources as well as overcoming individual members’ weaknesses and challenges collectively. Moreover, a critical analysis on members’ contribution reveals that each of the individual members in the bloc offers a strategically unique component to the overall bloc performance. In this case, the contributions range from economic from Brazil resources, India labor force and China economic production to Political by Russia influence in the region and South Africa influence in the African continent. In addition, despite the established individual members’ weaknesses, the evaluation research develops the evaluation and argument that the bloc through its flexible and informal structures mission’s execution approach is bound to achieve the strategic goals on geopolitical and economic dominance by 2050. Finally, the research establishes a potential membership expansion into the future with Japan as one among the most prospective entrants onto the bloc. References Beausang, F., (2012). Globalization and the BRICS, London: Palgrave Macmillan. Borodaevskiy, A., (August 8, 2013). Cross Purpose BRICS Scheme, The Japan Times. Retrieved from < http://www.japantimes.co.jp/opinion/2013/08/08/commentary/world-commentary/cross-purpose-brics-scheme/> Chowdhury, J., (2014). Unequal development: What’s the social cost of the BRICS’ economic growth?, Retrieved from < http://rt.com/op-edge/brics-social-economic-growth-896/> Korgeny, F.A., & Muller, B. N., (2013). SAFPI Policy Brief No. 49, SAFPI, South Africa Moghadam, R., (2011). New Growth Drivers for Low-Income Countries: The Role of BRICs, IMF. Mpoyi, R., (2012). The Impact of the “BRIC Thesis” and the Rise of Emerging Economies on Global Competitive Advantage: Will There Be a Shift from West to East?, Journal of Applied Business and Economics, 13(3), pp. 36-47 Oneil, J., (2001), Building better Global Economic BRICS, Global Economic Paper No.66, Goldman Sachs. Oxford University Press, (2012). The BRICS Report, New Delhi: Author Prasad, R. B., (2011). BRICS and the Global Economy, Mumbai: FTKMC. PWC, (2013). World in 2050 The BRICs and beyond: prospects, challenges and opportunities, London: PWC economics, Reissen, H., (2013). How Sustainable are the BRICS social and Economic Policies. Retrieved from < http://www.asiapathways-adbi.org/2013/06/how-sustainable-are-the-brics-economic-and-social-policies/> Saran S, Singh, A., K., & Sharan, V., (2013). A Long-Term Vision for BRICS, New Delhi: Observer Research Foundation. Scroote, M., (2011). Brazil, Russia, India, China and South Africa: Strong Economic Growth – Major Challenges, DIW Economic Bulletin 4, pp. 16-22 Song-yi, S., (2013). BRICS market entry with differentiated Strategies, KITA Reports. Retrieved from < http://www.kita.org/engapp/board_view.jsp?no=1176&grp=S3&code=S3021> Stuenkel, O., (February 17, 2012). Can the BRICS articulate a Common Vision?, Post Western World. Retrieved from The BRICS Post, (2012). BRICS: The real reason they are important. Retrieved from http://thebricspost.com/brics-the-real-reason-they-are-important/ The Economist, (March 29, 2013). Why IS South Africa Included in the BRICS?, Author. Retrieved from The European Parliament, Directorate General for External Policies, Policy development, (2013). The Role of the BRICS in the Developing World, Brussels: Author. Wacker, G., (2013). China’s role in G20 / BRICS and Implications, Berlin: German Institute of International and Security Affairs. Yakovenco, A., (April 9, 2013). BRICS is building a model for Global Cooperation, The DAILY Telegraph. Retrieved from < http://www.telegraph.co.uk/sponsored/rbth/politics/9983019/brics-summit-global-co-coperation.html> Read More