Brics

FINAL ESSAY

BRICS: emergent economies

Teacher: SIMON ADAMS

LONDON, 19 SEPTEMBER 2011

BRICS: emergent economies

The term BRICS is an acronym that refers to the countries of Brazil, Russia, India, China and South Africa which all are considered to be at a similar stage of new advanced economic development. This expression was mentioned by Jim O’Neill from Goldman Sachs, which is animportant American investment banking and securities firm. Initially the thesis was BRIC ‘Brazil, Russia, India and China’, and then in March of 2011, South Africa joined to BRICS. There are many optimistic projections that assume a successful development of these countries, but on the other hand, many specialists argue about situations and problems that could affect their growth. This paper willgive a briefly idea about BRICS nations and will describe how the Russian and Brazilian economies has been growing due to improvements in the energetic and natural sectors and also with the application of open to trade policies that boost these countries to be more competitive, successful, and solid. It is important to mention that my interest to talk about Brazil and Russia is not just because Iam from South America but also, due to Russia maintains close commercial relation with Colombia, which is my country.
It is widely believed that if the things go right, BRICS nations could became a very important source of new global spending in the not too distant future. As Wilson (2003, p4) advocates, over the next 50 years, the BRICS’s economies could become one of the biggest in theworld economy. India’s economy, for instance, could be larger than Japan’s by 2032, and China’s economy larger than the US economy by 2041 and larger than everyone else’s as early as 2016; The BRICS’s economies taken together could be larger than the G6 ‘The US, Japan, the UK, Germany, France and Italy’, by 2039. Then, following reports have been revealing rising rates that surpassedexpectations.
The principle supposes that China and India will become the world’s dominant suppliers of manufactured goods and services, respectively, while Brazil and Russia will became similarly dominant as suppliers of raw materials, whereas South Africa provides the institutional stability. It is important to say that these countries are not a political alliance, nor a formal trading association, butthey have the potential to form a powerful economic block.
Firstly, restructuring in the electricity sector is one of the most important decision that the Russian government has made. Russia is one of the largest electricity producers globally. After a prolonged period of underinvestment and an industry-wide reform, the Russian electricity industry has emerged in its liberalized state with numerousopportunities for strategic and portfolio investors, equipment manufacturers, and service providers. Also the improvement is clear between 2000 and now, the Russian government recovered and introduced structural reforms to address the economic rigidity left over from soviet days, and adopted a new tax code, a modern labour code; a land code that legalised the purchase and sale of both urban andagricultural land; and a reduction of red tape and harassing inspections of small businesses.

Russia in 2003 embarked on the restructuring of its electricity sector. According to MacFarquhar (2007) ‘The reform is intended to introduce competition into electricity production and supply, leaving dispatch, transmission and distribution as regulated natural monopolies with non-discriminatorythird-party access to the networks’. The ultimate aim of the reform is to create conditions that will encourage both investment in new capacity and greater efficiency of both production and consumption. Additionally, the power generation industry is a key enabler for Russia's economic growth as it is fuelled by the expansion of extracting and processing industries that require significant amount power...