BRICS countries are poised to be the economic superstars of the 21st century. They have defied the odds and achieved spectacular growth rates that have seen them at least abreast of the G7 countries, if not better. They have also become more influential in shaping the global agenda and institutions, offering an alternative model to the G7 countries (China brokering talks between Iran and Saudi Arabia is a case in point).
By Admire Maparadza Dube
Let us examine the economic performance and potential of the BRICS countries, using various indicators such as Gross Domestic Product (GDP), trade, investment, innovation and human development.
GDP: The BRICS countries have already surpassed the G7 countries in terms of economic power measured by purchasing power parity (PPP), which adjusts for differences in price levels across countries. According to the International Monetary Fund’s (IMF) World Economic Outlook Data Base, the BRICS countries accounted for 31,5% of the PPP-adjusted global GDP in 2022, while the G7 countries provided 30,7%.
However, in nominal terms, which do not adjust for price levels, the BRICS countries still lag behind the G7 countries. Nonetheless, they are expected to overtake them by 2050. The IMF projects that the BRICS countries will have a nominal GDP of $95,6 trillion by 2050, compared to the expected $87,8 trillion for the G7 countries.
Trade: The BRICS countries have also become major players in global trade, both as exporters and importers. They have diversified their trade partners and products and increased their share of world trade. According to the World Trade Organisation (WTO), the BRICS countries accounted for 22,6% of world merchandise exports and 23,9% of world merchandise imports in 2020, up from 15,5% and 14,9%, respectively, in 2010.
The BRICS countries have also expanded their trade among themselves, forming a dynamic intra-BRICS market. According to a report by Oxford Development Studies, intra-BRICS trade increased from $93 billion in 2001 to $323 billion in 2018. Note that this is still a far cry from around $4 trillion intra-trade between G7 nations.
Investment: The BRICS countries have also become major sources and destinations of foreign direct investment (FDI), which reflects their attractiveness and competitiveness as economies. According to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2021, the BRICS countries received $277 billion in FDI inflows and made $145 billion in FDI outflows in 2020. The BRICS countries have also established their own lending institution, the New Development Bank (NDB), which aims to support infrastructure and sustainable development projects in the BRICS and other developing countries. The NDB has approved 82 projects so far worth $30 billion since its inception in 2015.
Be on the watch for my future analysis piece on NDB, which I will present in the coming weeks.
Innovation: The BRICS countries have also invested heavily in innovation, which is essential for enhancing productivity and competitiveness in the global economy. They have increased their spending on research and development (RD), improved their patenting activity, and boosted their scientific publications and citations.
According to the World Bank’s World Development Indicators, the BRICS countries spent 2% of their GDP on RD in 2018, up from 1,3% in 2010. According to the World Intellectual Property Organisation’s (WIPO) Global Innovation Index 2021, China ranked 12th among 132 economies in terms of innovation performance, while India ranked 46th, Russia ranked 49th, Brazil ranked 62nd and South Africa ranked 63rd.
Human development: As of 2021, the estimated total population of the BRICS nations is approximately 3,4 billion people. Here’s a breakdown of the population for each of the member countries: Brazil: The estimated population of Brazil is around 213 million people. Russia: The estimated population of Russia is around 145 million people. India: The estimated population of India is around 1,39 billion people.
China: The estimated population of China is around 1,4 billion people. South Africa: The estimated population of South Africa is around 60 million people. The BRICS countries have already made significant progress in human development, which measures the well-being of people beyond income.
They have improved their health outcomes, education levels, gender equality and environmental sustainability. According to the United Nations Development Programme’s (UNDP) Human Development Report 2020, China ranked 85th among 189 countries and territories in terms of the human development index (HDI), which combines life expectancy, education and income per capita.
India ranked 131st, Brazil ranked 84th, Russia ranked 52nd and South Africa ranked 114th. So as a bloc, and individually, there still is some way to go to be considered a top class in terms of “human development.”
This article is authored by Dr Admire Maparadza Dube. The opinions expressed herein are solely his own. He can be contacted at email@example.com