Whatever happened to the BRICs?
Trajectory Trends Breakfast
28th April 2016
Introduction
2
Whatever happened to the BRICs?
WHAT ARE THE BRICS?
The BRICs: Origins
4
BRIC Countries in 2001
Very large in terms of size & population
Rapidly expanding domestic markets
Untapped labour reservoir
Most important countries in their respective regions
Had displayed impressive growth figures before 2001
Were undergoing military modernisation efforts to preserve strategic interests
Source: CNBC Finance
Shifting balance of power
5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Emerging/developing
Advanced
% of Global GDP held by nations
IMF WEO April 2016
The financial crisis
6
G20 – Twice as democratic as G8?
Current state of play
7
CRACKS IN THE BRICS
Significant disparities between
GDP Per Capita in each BRIC
10,738
12,735
11,726
7,590
1,581
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
World Russia Brazil China India
Very sharp divergence in GDP
Per Capita – Current US $ Dollars
(2014 Data)
9
-6%
-4%
-2%
0%
2%
4%
6%
8%
2013 2014 2015 2016 2017
IMF WEO GDP Growth 2014-2015 and
Projections to 2017
Brazil Russia China India
IMF WEO 2015
Demographic divergence
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Total population growth by country, annually for 2013-2030
China Brazil India Russia Poland Ukraine
10Source: UN World Population Prospects, 2015
Age Dependency Ratios in BRIC countries
11
0 5.0 10.0 15.0 20.0 25.0 30.0
Brazil
China
India
Russia
Poland
Ukraine
Over 65s as a % of working-age population
World Bank Data, 2014
Technologically diverse
% using the internet (all people)
Source: ITU 2013
Distinct Domestic Realities
INDIA RUSSIA BRAZIL CHINA
All have been exposed to endemic corruption, regional income
inequalities, dependence on commodities exports, poor institutional
and regulatory frameworks
13
CSIS Report 2015
Trust in Political and Media
Institutions plunging in some BRICs
20% 21%18%
29%33%31% 31%
26%
43%41%
49% 51%
24%
69%
61%
26% 28%
7%
43%
29%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Multinational
business leaders
National business
leaders
Politicians Newspapers TV
% saying they trust each group/source
Russia China India Brazil
14Source: Trajectory Global Foresight 2014-2015
No convergence between national
priorities in recent decades
15
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Fighting rising prices
Brazil China India Russia
0%
5%
10%
15%
20%
25%
Protecting freedom of speechBrazil China India Russia
Source: World Values Survey/Trajectory Global Foresight 1989-2015
Goldman Sachs closes BRIC fund
16
-30
-25
-20
-15
-10
-5
0
5
10
15
20
2010 2011 2012 2013 2014
Goldman Sachs’ BRICS fund, assets under
management
Source: Goldman Sachs, September 2015
WHAT NEXT?
17
Fragility of the BRICS as a political project
18
707
269
263
239
199
0 100 200 300 400 500 600 700 800
China
India
Brazil
South Africa
Russia
Commercial Interests Harmed by a Fellow BRICs
Member (no. of occasions) since 2010
"Conflicting interests and the
indisputable political, social, and
cultural differences among the
group's members have kept the
BRICS from translating their
economic force into collective
political power on the global stage”
- Center for Strategic and
International Studies October Report
(2015)
Source: Global Trade Alert
The continued importance of
advanced markets
19
Rank GDP per Capita
(2016)
Rank Ease of Doing
Business (2015)
Rank Innovation Index
(2015)
1 Luxembourg 1 Singapore 1 Switzerland
2 Switzerland 2 New Zealand 2 UK
3 Norway 3 Denmark 3 Sweden
4 Qatar 4 South Korea 4 Netherlands
5 Macao SAR 5 Hong Kong 5 US
6 US 6 UK 6 Finland
7 Iceland 7 US 7 Singapore
8 Ireland 8 Sweden 8 Ireland
9 Denmark 9 Norway 9 Luxembourg
10 Singapore 10 Finland 10 Denmark
71 China 51 Russia 29 China
73 Russia 84 China 48 Russia
76 Brazil 116 Brazil 70 Brazil
142 India 130 India 81 India
Source: IMF, World Bank, McKinsey, 2016
Digital globalisation
20Source: McKinsey Global Institute, 2016
Away from acronyms
21
Algeria
ArgentinaArmenia
Australia
Azerbaijan
Bangladesh
Belarus
Brazil
Bulgaria
Burkina Faso
Canada
Chile
China
Colombia
Cyprus
Ecuador
Egypt
Estonia
Ethiopia
Finland
France
Georgia
Germany
Ghana
Guatemala
India
Indonesia
IranIraq
Italy
Japan
Jordan
Kazakhstan
Kyrgyzstan
Lebanon
Libya
Malaysia
Mali
MexicoMoldova
Morocco Netherlands
New Zealand
Nigeria
Norway
PakistanPeru
Philippines
Poland
Qatar
Romania
Russia
Rwanda
Serbia
Singapore
Slovenia
South Africa
South Korea
Spain
Sweden
Switzerland
Tanzania
ThailandTrinidad and Tobago
Tunisia
TurkeyUAE
Uganda
UKUkraine
Uruguay
USA
Uzbekistan
Viet Nam
Yemen
Zimbabwe
A richer understandingValues, life events and national wealth
Bubble size = GDP per capita
Ha
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en
ea
rlie
r Li
fe e
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nts
H
ap
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n la
ter
Values/outlook (16-35s)More traditional More modern
Developed & ModernForward thinkersCaught betweensTraditionalsDeveloping and Traditional
UK Implications
23
A date for your diaries
24
The Future of the UK: domestic fragmentation
Wednesday 25th May
Thank you