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Coined by former Goldman Sachs economist Jim O’Neill in 2001, the “BRIC” countries – Brazil, Russia, India and China – were identified as having the potential to overthrow the economic hegemony of the G7 nations to become the top-four powerhouse economies of the century.
In 2009, the leaders of the BRIC countries held their first summit, making it a formal institution and more than just an economist's shorthand. Then, in 2010, at China’s invitation, the term was expanded to “BRICS” to include South Africa (although it’s worth noting that O’Neill was highly critical of this move.)
From now onward (or so O'Neill would have it), these countries are going to be a big part of your overseas trade.
Currently, Brazil is 12th, Russia is 11th, India is 6th and China is 2nd in global GDP rankings1. Pre-Covid, PwC forecast2 that emerging markets could grow, on average, twice as fast as the G7 over the next few decades.
The UK-based Centre for Economics and Business Research projects that China will become the world’s largest economy by 20283. "For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China," the report states. "The Covid-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China's favor."
Indeed, despite the pandemic, China held firm to its position as the star of the BRIC countries. The “world’s manufacturing hub” actually traded more during the period, according to DHL’s Global Connectedness Index, which analyzed the flow of people, information, trade and capital around the world. The country’s strict Covid protocols helped it avoid a recession in 2020, unlike other major economies.
India is forecast to be the fastest growing economy in the world this year4. The pandemic has increased the rate of digitization within the country, helping to improve the productivity of labor and capital, whilst government initiatives and an increase in private investments are helping stimulate the economy further.
The big question for your business is: could they be your next export markets? Here’s our at-a-glance guide to the BRIC economies.
POSITIVES: The second biggest economy in the Americas after North America, and the largest e-commerce market in Latin America – e-commerce there grew by 31% in the first half of 20216.
NEGATIVES: The smallest growth forecast of all the BRIC countries; inflation and lower salaries are leading to decreased consumer spending within the service and retail sectors. High import taxes and tariffs deter many cross-border retailers.
Major imports: Manufactured goods, namely machinery, fuels, and pharmaceuticals products; parts for motor vehicles and tractors.
Has it delivered on the BRICs promises? Brazil’s economic outlook is likely to remain unfavourable for the foreseeable.
POSITIVES: Russia has one of the fastest-growing online shopping markets in the world – and in 2018, 50.8% of Russian consumers’ online orders were made to cross-border retailers8. The country has the lowest debt (%GDP) of all the BRIC countries9.
NEGATIVES: High inflation – in February, Russia’s central bank raised interest rates to a five-year high. Financial analysts predict the country will pull back from the global economy, resulting in lower growth.
Major imports: Machinery, computers, vehicles, pharmaceuticals, plastics, aircraft and spacecraft components, iron, steel, fruits and nuts.
Has it delivered on the BRICs promises? Russia still holds international trade power yet a return to austerity is a very real threat.
POSITIVES: The world’s sixth largest economy with a huge population, India leads the BRICs for growth forecast this year – nearly double China’s. Fuelled by an increase in internet penetration and digital literacy rates, e-commerce within the country is growing – sales are forecast to reach US$120.1 billion by 202511.
NEGATIVES: Lowest GDP per capita of all the BRIC countries. The country’s vast size and diversity can pose challenges for cross-border sellers wishing to tap into the market there.
Major imports: Fuels, gems, precious metals, electrical items and computers, chemicals, plastics, animal/vegetable fats, oils, waxes, iron and steel.
Has it delivered on the BRICs promises? India has been playing in China's shadow, but it's catching up – and fast.
POSITIVES: Likely to overtake the US as the world’s largest economy by the end of the decade. Big opportunities for e-commerce businesses: in 2020, China’s online sales reached US$2.3 trillion13, just over half of the world's e-commerce market total. Supply chain disruptions caused by Covid and surging demand are expected to stabilize in the second half of 2022.
NEGATIVES: China’s growth is slowing down, with a possible knock-on effect to nearby economies (Indonesia, Thailand, Hong Kong). The pandemic has worsened domestic and external economic imbalances.
Major imports: Electrical equipment, fuels and oil, computers, ores, optical and medical equipment, vehicles, plastics, chemicals and copper.
Has it delivered on the BRICs promises? Most certainly, and there's more still to come.
Beyond the BRICs, which other countries are ones to watch?
The Next Eleven – or “N-11” – was coined by Jim O’Neill and his Goldman Sachs colleagues in 2005 and consists of eleven emerging markets with huge economic potential: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam.
Though on a slower growth trajectory than the BRIC countries, O’Neill & co still predicted that the Next Eleven could reach two-thirds of the size of the G7 economies by 205014. This theory was based on macroeconomic stability, technological capability, human capital and political conditions.
It’s worth noting that the Next Eleven markets were identified nearly 20 years ago, and each country has since had varied outcomes in meeting its forecast potential. Writing in 2018, Jim O’Neill said “South Koreans now enjoy a standard of living similar to that in the European Union, which makes many analysts’ persistent categorization of South Korea as an “emerging economy” all the more baffling”, whilst noting that Mexico and Egypt’s performance has been “somewhat disappointing.”
Mexico, Indonesia, Nigeria and Turkey make up the MINT countries. You’ll notice that all four appeared in the Next Eleven category – think of MINT as an update. Each has a large and youthful population, and Goldman Sachs predicts that they could be inside the top 20 economies by 2050.
BRIC, N-11, MINT – they’re just acronyms used by economists, but play an important role in helping businesses with international ambitions identify the best markets to target.
The barriers to global trade are falling, just as new economies are finding their feet. Now's the time to partner with an international specialist who can help you reach customers across the world. Apply for a DHL account today and see where it takes you.
2 - PwC report, 2017
3 - Centre for Economics and Business Research report, BBC News, December 2020
4 - International Monetary Fund, NewsOnAIR, October 2021
5 - International Monetary Fund, January 2022
6 - International Trade Administration, January 2022
7 - International Monetary Fund, January 2022
8 - esw, June 2021
9 - CountryEconomy.com, 2022
10 - International Monetary Fund, January 2022
11 - Forbes, July 2021
12 - International Monetary Fund, January 2022
13 - East Asia Forum, October 2021
14 - The Balance, November 2021
15 - Jim O’Neill, Project Syndicate, April 2018