A Decade of BRICS: Prospects and Challenges for Next Decade

Indian Journal of Management, Forthcoming

10 Pages Posted: 31 Jan 2013

Date Written: July 30, 2012

Abstract

Purpose – The purpose of this paper is to identify and discuss whether the argument of BRIC countries as the economic pillar of global economy is still valid after ten years. Parameters such as rising middle class and consumption are discussed to validate the argument.

Design/methodology/approach – The paper includes a conceptual discussion which considers the importance of BRIC countries as emerging markets. Equity market returns from BRIC markets as well as GDP growth is looked at for past decade. Also discussed are number of recent arguments on BRICs from leading economist, financial journalists.

Findings – The initial hype, with which BRIC countries were portrayed, is definitely not valid today given the fact that last decade was the most turbulent economic period since the great depression of 30s. However, collectively these countries do account for sizable portion of global economic activities, hence, acknowledging their order is important for global economic stability. In the current global economic context, BRIC countries are not 'the' solution to the US & European woes. The paper identifies and recommends key economic roadblocks that BRIC countries should overcome so as to sustain their economic growth over next decades.

Practical implications – In the current economic scenario, BRIC countries are still looked upon as the alternative markets that would sustain the growth. Despite few identified weaknesses, still involvement in BRIC markets can be a valuable learning opportunities for international businesses and investors alike.

Originality/value – The paper's originality and value lies in suggesting that notion of BRIC countries as an alternative investment class was only singular. These nations were expected to create economic miracles and lead the 21sr century. However, ground realities in global economic environment context are different. BRIC countries shall need to overcome structural problems and position themselves as the backyard of global economic growth offering more than just alternative investment choice and low cost solutions within a framework of risk-return analogy.

Keywords: BRIC, global economy, consumption

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JEL Classification: O10

Suggested Citation

Atale, Nikhil, A Decade of BRICS: Prospects and Challenges for Next Decade (July 30, 2012). Indian Journal of Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2208920

Nikhil Atale (Contact Author)

Eastman Advisors ( email )

Nagpur
India

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