Introduction
The acronym BRICS denotes five major emerging economies of Brazil, Russia, India, China and South Africa. The role of these countries in international business development is significantly and rapidly growing. The BRICS cause changes in the international cooperation and become an important player on the global business scene. However, these countries face different challenges; they complement each other’s weak points and gain success together. The BRICS cooperation opens new opportunities for international business development within these states as well as the expansion of their influence over the entire world.
Overall Impact of BRICS
The BRICS influences various global sectors such as economy, politics, social and environmental segments. These countries have different characteristics and influence the world in various ways. However, despite the differences, the BRICS countries have common tasks and interests and they will certainly find opportunities to influence international investment and business rules. Moreover, there are a number of countries that want to become a part of the BRICS.
According to their cultural and socio-economic needs the BRICS can find ways of conducting business appropriate for them. At this stage the member countries promote trade, investment and business links among their nations. The business leaders build strong partnerships and support the development initiatives within the BRICS. The impact of the BRICS on the global environment makes ecological issues more urgent. In addition, the enormous consumption of the resources together with technological innovations destroy the environment.
The creation of the BRICS bank is a milestone in the world economy. Its creation by the member countries is a great shift in the global finance and politics operation. The BRICS countries expect to get funds for needed social and physical infrastructure. Despite the fact that observers discredited the idea of this bank creation, it has been successfully launched and shows promising results. Moreover, now these countries will not depend on the Word Bank and adhere to its restrictive rules.
Contribution of the Member Countries
The BRICS unites almost disparate nations and their cooperation is unique in any meaningful way. These countries have some similar features such as large population and territories. In other terms these countries are different. As they have different levels of industrialization, different natural resources, their impact on international business is not the same. According to that, the actual weight of each country in the global economy differs as well.
India and China are two countries with the biggest popularity in the world. Thus, BRICS would certainly play significant role in finding solutions for climate change, water shortage and other environmental issues. China and India obtain low-price labor force due to its population. So their manufacturing and market share in services does not require much money. Russia has vast energy and mineral resources. South Africa possesses rich natural resources and Brazil is a top producer of agricultural output. So, the supply of raw materials from Russia, Brazil and South Africa complements this symbiosis. According to the president of China Hu Jintao, the path of Brazil, Russia, India, China and South Africa aims at cooperative, peaceful and harmonious development (Radebe, 2012).
These countries are important for each other as they complement each other’s weaknesses and multiply the strengths. The BRICS cooperation has huge potential and broad prospects for international business development. They expand their cooperation into various areas, thus bringing benefits to their nations as well as global relations. The BRICS countries, representing emerging markets and developing countries, play an important role in international business development. Their cooperation leads to more effective global business governance, balanced world economy and international relations. Now the BRICS countries account for a quarter of global output and this number seems to grow. With the help of the BRICS the emerging countries can achieve fair treatment and new opportunities for foreign investments and international business development.
Strengths and Weaknesses of the Member Countries
China is the country dominating on the international business scene. Its role in global business is significantly growing as it continues to develop its inward and outward direct investments. In addition, the country is a perfect host environment and uses it to be an active participant if the international economy and business in particular. The country possesses a large and skilled workforce, huge infrastructure investments and entrepreneurial culture that can make its economy grow to become the largest in the world. The country experiences the lack of infrastructure and continues to invest in this sector. The most urgent problems are the lack of raw materials, energy resources and environmental problems. And yet, another challenge is social instability as there is the huge wealth imbalance and income inequality between different areas of the state. China opens unique opportunities for international business and, despite some challenges, it is a dynamic place for investors and entrepreneurs.
India is the second largest market and the fastest growing economy in this group. India is definitely a country of opportunities for international business as it is developing and improving significantly. Due to the vast area of the country it has diverse cultures and traits. So, it is powerful in intellectual, technological, commercial and political aspects. This diversity gives much more offers to the international business development. And in the BRICS this growth would be enhanced by the partner countries. It is evident that India still has much to offer to the entire world and its role in international business will certainly grow.
These two countries develop in the same direction; both have vast populations and high-level economies. Thus, their cooperation within the BRICS can multiply chances for successful development of international business.
Two other countries with similar features but still different opportunities are Russia and Brazil. The strengths of Russia are in its reach natural and energy resources and supply of raw materials that define the country among many others in the world. The economy of the country and the external business relations have been increasing since the collapse of the USSR. However, there are a lot of weaknesses that put the international reputation of the country and therefore global business opportunities in danger. One of them is corruption that is the major concern in Russia and as a result direct foreign investments are low. Also, it leads to the loss of trust to the country by potential external business colleagues. In such a way, Russia must improve its business environment as it is a fast-growing market and many international businesses see it as an important partner.
The country where business investments promise huge benefits is Brazil. Almost all international business companies pay attention to this country. It has wealthy mineral resources, stable currency and political system. Also it has perfect infrastructure and witnesses huge technological development. Some other features such as high growth rate, investment grade rating, strong labor market and manufacturing base open good opportunities for international business market. But still there are some weaknesses related to the local cultural and structural peculiarities. They include corruption, excessive taxation, legal and bureaucratic complications.
Many global companies suggest South Africa as an excellent base for their business. The country has large population and thus low labor costs, excellent infrastructure and business environment. These strategic strengths give the country global competitive advantages. The sufficient water supply and natural resources along with low cost labor make the country extremely attractive for international business. South Africa has strong political and economic foundations, however its stability and future growth may face severe challenges. The population of the country does not get relevant job skills, the level of income is unequal, and poverty and unemployment worsen the situation.
Future Outlook
The specialists forecast that by the end of this decade the global output of these countries will have accounted for about one third. China continues to gain economic power and may have the world’s largest economy in the future (A., 2013). However, it is difficult to predict the future of this group as these countries are too diverse to look in one direction.
The financial and technical assistance of these new leaders is increasing as they have defined the ways and means of economic and business ncooperation in particular. The BRICS aims to achieve more political and business influence than traditional western unions. Thus, the global unions as the G7, the European Union and others should adjust to this group of new economic giants. The ways of influence on international business include direct foreign investments and the development of trade and financing. Though there are arguments denying the BRICS as emerging player on the international business scene, this group obviously causes changes in the global development. Thus, the opportunities for foreign assistance are different in the BRICS due to their key areas, institutional settings and size. So they focus on business cooperation with neighboring countries, technical assistance and integration.
Conclusion
The BRICS countries bear a great responsibility for the future of international business as the choices they make now will influence not only their countries, but the entire world. Thus, these economic giants must work on improving global economic and political weaknesses. Also, the development of the BRICS impacts the world’s social and environmental sectors, and they should find solutions for global water and climate change issues. The member countries are significantly different and each one has its strengths and weaknesses. However, their cooperation can complement the necessary points. The future of the BRICS seems promising as the group is gaining more and more power and experience to take its place among the world leaders.
