Chapter 4 CT Question

Order Description Read the following article. Please build your discussion on the question posted by Dr. C at the end of this article. Q: Goldman Sachs speculates that by 2050 these four economies will be wealthier than most of the current major economic powers. Should you, as the future business leaders of the world, be concerned by this report? Why or why not? Brazil, Russia, India And China - BRIC By root (Links to an external site DEFINITION The BRIC thesis posits that China and India will, by 2050, become the world's dominant suppliers of manufactured goods (Links to an external site.) and services, respectively, while Brazil and Russia will become similarly dominant as suppliers of raw materials (Links to an external site.) . Due to lower labor and production costs, many companies also cite BRIC as a source of foreign expansion opportunity, and promising economies in which to invest. INVESTOPEDIA EXPLAINS BRIC is an acronym for the economies of Brazil, Russia, India and China combined, originally projected to be the fastest growing market economies by Jim O'Neill (Links to an external site.) of Goldman Sachs first in 2001, but most prominently in a follow up paper published in 2003. It has been speculated that by 2050 these four economies would be wealthier than most of the current major economic powers. The Goldman Sachs (Links to an external site.) thesis doesn’t argue that these countries are a political alliance (like the European Union (Links to an external site.) ) or a formal trading association - but states instead they have the potential to form a powerful economic bloc. The countries haven’t announced any formal trade agreement between them, but leaders of the four countries have attended summits together, and acted in concert with each others interests. BRIC or ‘Big Four’ is now also used as a more generic marketing term to refer to these four emerging economies. Columbia University has established the BRICLab (Links to an external site.) , where foreign, domestic, and financial policies of BRIC members are examined. While BRIC has no publicly disclosed formal quadrilateral trade agreement, the heads of state of the BRICS countries have met regularly since (Links to an external site.) 2009 (Links to an external site.) at a yearly summit (Links to an external site.) . The first summit was held in the Russian city of Yekaterinburg in 2009, presidents Luiz Inácio Lula da Silva of Brazil, Hu Jintao of China, Dmitry Medvedev of Russia, and Prime Minister Manmohan Sing of India were all in attendance. South Africa entered a bid to join the BRIC group in August of 2010 and was eventually invited in December of that same year, and attended the April 2011 summit in the Chinese city of Sanya, effectively changing the name of the group to BRICS. Criticism of BRICs While a lot has been made about the enormous potential growth of the BRIC nations, O’Neils thesis has been challenged (Links to an external site.) over the years as the economic and geopolitical climate has shifted. A couple fundamental criticisms of the the investment concept include the idea perceived by some as implicit in the argument for continuous growth by raw material providers that natural resources are limitless. Those critiquing the model of growth say that it ignores the finite nature of fossil fuel, uranium, and other resources (Links to an external site.) . It’s been argued by Deutsche Bank Research and editorials written in Foreign Policy Magazine that China outstrips the other BRIC members economies by a huge amount, making up 70% GDP growth of the group countries, putting the country in a seemingly different category (Links to an external site.) than other members of BRIC. Still others have cited human rights issues in China and Russia, as well as Russia’s annexation of Crimea and direct or indirect support of Russian separatist fighters in Ukraine as reason to doubt a fundamental tenants of the BRIC thesis (Links to an external site.) . An editorial written for Reuters and published in 2014 categorized Russia’s belligerency as evidence that globalization is not inevitable, nor is it irreversible. Criticism aside, as of 2013 combined BRIC GDP has outpaced Goldman Sachs expectations by nearly half. The original BRIC theory will continue to evolve as time goes on as some projections fall short and others meet their mark. Q: Goldman Sachs speculates that by 2050 these four economies will be wealthier than most of the current major economic powers. Should you, as the future business leaders of the world, be concerned by this report? Why or why not?