“BRICS” is an acronym for Brazil, Russia, India, China and South Africa. These countries began meeting annually in 2009. The “BRICS” nations have some of the fastest growing economies. The nations have become some of the largest producers and consumers of goods. They account for approximately 40 percent of the world’s population and 25 percent of the GDP. All of the “BRICS” nations have increased their GDP since 2000. Each nation has unique resources and attributes that make it an economic power house. Brazil and Russia have many exportable resources. India and China’s workforce are skilled, inexpensive, and large. South Africa has a large amount of precious metals and produces approximately 45 percent of the continent of Africa’s electricity.
FINANCIAL CRISIS AND BRICS
The financial crisis of 2008 caused economic activity to significantly slow. The slow was felt in the “BRICS” economies through “trade, finance, commodity, and confidence channels”. The decrease in the United States spending caused a decrease in the “BRICS” nation’s exports. The nations lacked confidence in the United States, their largest importer, to sustain their respective economic booms. Capital flow slowed which led to market losses and inflation, causing a decrease in credit extended to the United States. “BRICS” nations were less confident when investing in the United States market.
As foreign investment decreased in Brazil, the nation experienced a decrease in exports and in obtaining external credit. The GDP decreased by 0.6...