The BRICS (Brazil, Russia, India, China, and South Africa) nations are increasingly important in international business. Provide a comprehensive description of the economy of each of these nations and identify reasons why the BRICS countries are growing in importance on the international stage. Also, describe the internal and external forces that may influence organizational success as it relates to these countries.
Finally, discuss the importance of the Saint Leo University core value of responsible stewardship relative to international business and the rise of these economies.
International Business and the BRICS Nations
With the increase in globalization in the contemporary business environment, business and countries are making the best efforts to trade with other nations from different parts of the globe not only to boost their economic growth but also to enhance integration. As a result of this business integration and globalization, new economies have emerged that are doing far much better than the traditional G8. The rise of Brazil, Russia, India, China and South Africa (BRICS) as emerging agonists in global development integration can be attributed to increased business technology as well as enhanced globalization that has enabled these economies to import and export large amounts of goods and services. According to current market statistics, over the last decade, BRICS as a group has increased their financial and technical assistance and created and developed unique manner and ways of economic integration, mainly through south to south collaboration with low-income countries (LIC) (BRICs Summit of Think Tanks & Li, 2011). Apart from striving for political power and prowess, the group is also striving for political power, thereby challenging the existing and traditional political and financial strength of western countries and western organizations such as donations from the likes of the European Union (EU). As a result of these efforts and struggles, BRICS has become to be known for its tremendous growth potential in the modern uncertain and volatile business environment. This assignment is focused on providing a detailed description of the economy of each of these nations and identify reasons why the BRICS countries are growing in importance on the international stage.
A description of the current status of the economy of BRICS
BRICS as a unit is on the front line of utilizing their economic power and ability to bring about economic and political changes in the modern business environment an approach that is challenging for most western countries that have dominated global politics and economy for decades and centuries. The birth of the BRICS can be traced back to 2006 when these four nations began their negotiations on creating a joint economic group or block to challenge the existing political and economic beliefs and policies. However, it is not until in 2010 that South Africa joined the group. As a result of the geographical and demographic compositions of these countries, BRICS economies substantially influence global development, especially for lower-income countries (Hentze & Syddansk Universitet, 2014). The significant influence of these countries is achieved through the promotion of trade stability and investment as well as cushioning worldwide recession in the contemporary economic crisis.
According to contemporary business statistics, BRICS countries are emerging as champions in the global development of international business. In the last few decades, these countries have expanded their financial and specialized assistance to the developing countries by enhancing their money-related integration with these countries through loans and grants especially to the countries of the south. The impact of these countries on the developing economies through the exchange, remote speculations as well as technological and innovative assistance is minimizing the political and technical influence of western nations on these economies; something of concern in the western states (United Nations, 2013). BRICS believes that monetary support to these countries is key to maintaining consistent and constant economic development and growth, minimizing resistance as well as improving and maintaining national power and control systems. Besides, eye to eye meeting and discussions between these two countries have been found to be at the center of the success of this trade association.
According to economists, Brazil economic freedom score is 51.4 making its 153rd freest economy in the world. This economic freedom provides an opportunity for both the public and private sector to stage a healthy competition for the available market, thus leading to economic growth and development in the country. Notably, Brazil ’s economy is perceived as the seventh most extravagant global financial framework; Brazil gloated a total national output of $2.3 trillion in 2014. Additionally, the country is one of the most populated nations in the Caribbean area and the South American terrain (Antonil & Coates, 2012). The country requires enormous changes in its exchange trade and civil progression to enhance the provision of social amenities and other necessities to the large population.
Brazil demonstrated moderate budgetary progress between 2011 and 2012. During this period, the GDP, which was 7.5% in pre-2012 reduced to 2.7% in 2011 and further decreased to 0.9% in 2012. There was a lopsided impact on the advanced output and industrial intrigue. The clarifications for the logjam were a direct consequence of the external and private elements, however the contemporary fiscal indications of power in the business arrangement (Antonil & Coates, 2012). Generally, Brazil is stable irrespective of the financial crisis as a result of the low development pace and changes in network arrange.
Oil prices, which increased in 2017 are expected to rise in 2018, and this is good news for Russia considering that it has an oil-financed economy. According to history and business statistics, Russia stood up out of the Soviet political and fiscal crisis to show signs of its improvement as a quality to be gathered with. The broad availability of the shared resources such as gas and oil has incomprehensibly supported Russia to stand and navigate through the financial crisis of 1998 (Sakai, 2016). The factual foundation of wages for the governing body is gas and oil. Social control of the gas and oil industry has secured administration in the country by ensuring that there are enough resources to fund all the operations of the nation.
Russia’s financial conditions are also standing up to a recession, with the GDP growth evaluated at 1.3% in 2015 from 3.4% in 2011. Russian commercial environment witnessed a decreased amount of trust in the consumers and a crumbling of the commerce because of this mistrust and those of expansive assistant improvements (Sakai, 2016). Notably, The World Bank has identified two states that emerged because of the Crimea crisis that was witnessed in the country back in 2014. These conditions include:
- Smaller risk: GDP advancement at 1.1% in 2014 and 1.5% in 2015. The pace of use is foreseen at 2%, as opposed to 3.4% in 2013 and 6.9% in 2012.
- Higher risk: This addresses the narrowing in Gross local products by 1.8%, through an extraordinary impact on the theories and financial activities.
India is the fourth most magnificent financial framework of this globe that is characterized by a high population of about 1.2 billion individuals. The most recent growth in India is of basic noteworthiness both for the global platform and for the private sector in the country. India saw an immense headway in horticulture, from a continuous dependence on agriculture, which introduced the nation to the source of the power of agribusiness by techniques for a net exporter level (Mallick & Marjit, 2008). Therefore, it is safe to state that the Indian economy is mostly based on the income and resources obtained from agribusiness.
India has an impressive degree of formal employment, and is the operational base of international pharmaceutical associations, information and creativity, steel, space advancements and precisely, the creating voice on the global stage, owing to its size and the size of the population (Mallick & Marjit, 2008).
Besides, there are distinctive dimensions of changes which the country needs to control. These economic changes that require close monitoring and management include:
- Unevenness in the whole economic dimensions like compensation package, grade, confidence, and sexual orientation of employees.
- Empowering capacities, employee development, and direction at a more vital level
- Change is the colossal wants of improvements on the current infrastructures, the advance of roads accessible to the ordinary citizen, and the improvement of harbors ports and airports.
It is safe to conclude that the financial system viewpoint is reasonable in that it is way off the mark, with more prominent measures of duties separated with the reasonable orienting economies, the country has a better future. Nonetheless, this can be directed through appropriate leadership and commitment of the leaders in the country.
China has changed its core financial system from the widely controlled monetary to the business sector based economy. The outcome of this shift was significantly useful as China has faced the fast financial framework and social change, with the GDP advancement in the country being recorded at around 10% every year. This financial and social changed has enabled the state to improve the lives of millions of people by pulling out around five hundred million people out of poverty (Hong, 2017).
The financial system of the country is estimated to be the second greatest economy around the world in the current global economic platform. Besides, achieving great economic success, China is still creating an economy in the light of the fact that its business area changes still ought to be done. China has the second most significant number of destitute individuals, behind India. The country has faced a difficult economic situations before to miss an economic change since it moved from higher salaries to average pay, which is much troubling and difficult than the move from average salary to low pay (Hong, 2017). However, this reduction of the compensation for civil servants has positively affected the economy by ensuring that there is enough money for government expenditure, which in turn improves the quality of life of individuals in the country. With persistence and good leadership, China will soon overtake the united states as the strongest and largest economy in the world.
One of the most astounding political attainment of the recent centuries is the political shifts and attainment of South Africa. Driving strategy that has inspired leaders in the country as well as the entire population since 1994 can be attributed to the African National Congress which has been in power since the independence. The African National Congress has taken a considerable part of the financial system improvements in South Africa (Rosmarin, Rissik, & Elias, 2014).
The managed data of financial sensibility and a stable global environment has provided the country with the total national yield to grow and develop at a constant pace for the decade up to the general spending changes of 2008-2009. Upgrades in the general public spending plan administration set-up, and ambitions to restore the colossal level basics by National Treasury unspecified a important part.
Under the leadership and guidance of Nelson Mandela, the serene growth of South Africa was essential among the most significant changes of decades back. Up to the economic crisis of 2008/09, the GDP growth and economic improvement in the county experienced a consistent advancement. Another primary improvement was in the fund associated with environment of South Africa: the designing and implementation of unsurprising budgetary techniques forced the country to exploit global security markets by methods for sensible sovereign risk distribution. The GDP growth of South Africa was 2.5% in 2012 from 3.5% in 2011 (Rosmarin, Rissik, & Elias, 2014). Despite this slump, the quality of life in the country has continued to improve in the last few years.
The importance of BRICS economies in the international forum
BRICS countries are bringing changes in the model of international and global collaboration, not only regarding exchange and money related business, but also as contributors to the political and economic development of lower income countries. Significant effects of this economic organization at the international platform cannot be ignored, mainly by the (LICs) (Quiliconi, Saguier, & Tussie, 2016). Some of these impacts include:
- Trade: this economic arrangement has substantially improved the amount of business at the international level by enhancing trade relations and minimize the interest of the EU in these developing countries. Besides, with the know-how and skills possessed by these countries and with the help of international organizations that provide technical assistance, developing countries can diversify their economies and become economically independent.
- Foreign direct investment (FDI): there is a healthy flow of resources and human resources from BRICS to the developing countries to help boost the trade and economic output of the developing nations. The steady flow of the FDI has a positive influence on the developing economies by improving their infrastructure, energy supply as well as market activities (Quiliconi, Saguier, & Tussie, 2016).
- Financing: for developing countries to enjoy significant economic and political development, they need stable funding to enhance the operations of the government and civil servants. Therefore, BRICS is providing enough finances not only to fund the administrations and governments of the developing countries, but also to fund economic activities such as the start of small and medium businesses in these regions.
Environmental forces affecting the organization and success of BRICS
Analysis and evaluation of the operations and functioning of the group show that this economic association is moving towards intragroup coordination and cooperation. There is an increase in trade integration among the participating members, and different companies and businesses are significantly benefiting from the alliance by increasing trade among themselves.
From the above patter, it is clear that the internal collaboration of the association along with the recent announcement of the formulation of the New Development Bank has only improved businesses and integration among the member countries. Besides, the external influences also substantially affect the economic development of each country. As these countries enjoy from the alliances, the benefits trickle down to all partners such as lower income countries who are the largest beneficiaries of this association (Quiliconi, Saguier, & Tussie, 2016). The influence of the external forces has forced these countries to join other international organizations such as UN, G20, UNFCC, and WTO.
Importance of the Saint Leo University core value of responsible stewardship relative to international business and the rise of these economies
The core value of Saint Leo University, “Capable Stewardship” expresses that all people are valuable and capable of achieving their dreams. The core values of the University accentuate on the “spirit of services” and growth of the local community. This is a clear sign of bringing a quality life to the community regarding life and commerce, that will in the long-run be enlarged to to the national stage and finally to the global degree (Saint LEO University, 2015).
The educational resource provided by the institution helps to encourage the sense universal expansiveness and nearby profundity, that encourages the growth of organizations over the globe with all the economies of this planet.
Saint Leo University Core Value
- Excellence: Saint Leo University is a valuable establishment. Every one of us, unreservedly, attempts to make sure that our teachings and learning create the character, take in the limits, and change the learning key to curve up morally time tested pioneers. The achievement of the University depends upon a flat out commitment to our essential goal, vision, and targets.
- Community: Saint Leo University makes Christian and friendly learning environment for all groups. We enable a spirit of having a spot, solidarity, and relationship in basis of shared trust and necessary to make socially supporting environment that test each and every one of us to tune in, to learn, to change, and to serve (Saint LEO University, 2015).
- Integrity: The devotion of Saint Leo University to brilliance asks for that its kinfolk face its essential goal and pass on its certification. The workforce, staff, and learning guarantee honestly, and secure in word and actions (Saint LEO University, 2015).
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BRICs Summit of Think Tanks, & Li, Y. (2011). BRICs and the global transformation: Considerations on the BRIC Summit of Think Tanks in Brasilia. Reading: Paths International.
Hentze, F., & Syddansk Universitet. (2014). How are the BRICS nations special? Odense: Syddansk Universitet.
Hong, Y. (2017). Networking China: The digital transformation of the Chinese economy. Urbana: University of Illinois Press.
Mallick, I., & Marjit, S. (2008). Financial intermediation in a less developed economy: The history of the United Bank of India. New Delhi, IN: Sage.
Quiliconi, C., Saguier, M., & Tussie, D. (2016). BRICS: Leadership in the Making. Global and Regional Leadership of BRICS Countries, 29-47. doi:10.1007/978-3-319-22972-0_3
Rosmarin, I., Rissik, D., & Elias, J. (2014). South Africa. New York, NY: Cavendish Square.
Saint LEO University – Mission & Values. (2015). “Mission and Values: Core Values”. Saint Leo University. Retrieved from: http://www.saintleo.edu/about/florida-catholic-university.aspx
Sakai, S. (2016). Russia and Energy Transactions in Northeast Asia. The Political Economy of Pacific Russia, 129-155. doi:10.1007/978-3-319-40120-1_6
United Nations. (2013). Africa-BRICS cooperation: Implications for growth, employment and structural transformation in Africa. Addis Ababa, Ethiopia: United Nations Economic Commission for Africa.
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