BRICS is an acronym that refers to Brazil, Russia, India, China and South Africa. All of these countries are deemed to be at a similar stage of economic development – that is, accelerated development.
The volume of investment in the BRICS economies has increased significantly. According to Global Investment Trends Monitor, a United Nations publication, investments in the BRICS more than tripled during the last decade, totaling $263 billion in 2012. This represents 20% of investment flows worldwide. This figure represents a significant increase since 2000, when foreign direct investment in the BRICS represented only 6%.
From 2003 to 2007, economic growth in Brazil, Russia, India and China (during this period South Africa was not yet a part of the BRIC) accounted for 65% of the expansion in the world’s economy, a trend that appears to be continuing.
Governmental and non-governmental agencies, together with international analysts, have all realized the potential of the BRICS, suggesting that investors should pay attention to the opportunities presented by these countries. In particular, they identify the investment opportunities offered by Brazil.
A study prepared by PricewaterhouseCoopers (PwC), “World in 2050 – The BRICs and beyond: prospects, challenges and opportunities,” shows the Brazilian economy may surpass the Japanese economy and become the fourth largest economy in the world by 2050. This same study shows that China, India and Brazil will gain their importance by lowering their production costs and growing their consumer markets.
Emerging market stocks are also increasingly valued. An April 2013 Bloomberg news article titled “Emerging Stocks Rally Most in One Month as Brazil Jumps” highlights the fact that emerging-market stocks rallied to have the biggest advance in a month, led by Brazilian equities.
Brazil’s potential for growth in the petroleum sector, made possible by discoveries of pre-salt, and its development in agro-mining, ethanol, aircraft, banking and general commerce sectors have been at the heart of its economic success. Growth in these sectors, together with the creativity of internal reforms instituted by the Brazilian government, have set Brazil apart from the other BRICS countries, leading Brazil to be the great investment option that it is today.
