Status and Function of BRICS in World Economic Layout

Because of the BRICS countries' perspective status in their regions, their own abilities and importance in the world, they have transformed from an economic concept into a compound concept. This article tends to discuss more of their economic cooperation, so the evaluation of the BRICS' international status is mainly focused on an economic aspect.

The BRICS are distributed in Asia, Africa, Europe and Latin America. In 2016 their total population took up about 41.9% of the worlds and GDP about 22.4% of the world's. From establishment to 2016, they contributed more than 50% to the growth of world economy. In recent years the change in status of BRICS countries in world economy can be shown from the following aspects:

First, there's a relatively rapid growth of overall abilities. In 2016, the GDP of the BRICS reached 16,848 billion USD, taking up 22.6% of world GDP in 2015, from 6.6% in 1980, growing 20 percentage points in 35 years (Table 1). In 2015, the economic prowess of BRICS has surpassed the European Union and is close to the US. From the estimates of the International Monetary Fund, it will surpass the US in 2020.

Table 1 BRICS GDP in world's share (unit: %, billion dollars)

Source: International Monetary Fund

Second, the openness of the BRICS is increasing by day and their influence on the world is increasing continuously. Th status shift of BRICS in world trade is especially notable, especially in imports. The scale of products BRICS imported from the world went up from 9.9% in 2005 to 15.3% in 2015, service product imports from 8.5% to 15.4%. The increase of status of developing countries in world import mainly come from BRICS (Table 2 and 3). As of capital flow, in the past, the BRICS attracted foreign investment mainly and now the countries are increasing investment in other countries. BRICS attracted 768.5 billion USD of foreign investment in 2005, and it went up to 2,372.5 billion USD in 2015, increasing 3.1 times. At the same time, investment scale from the BRICS went up from 313.1 billion USD to 1,745.4 billion USD, going up 5.6 times. The percentage of investment scale against the world's went up from 2.6% to 7% (Table 4).

Table 2 BRICS Product Import and Export & World Percentage (unit: 100 million USD, %)

Source: UNCTAD

Table 3 BRICS Service Import and Export & Percentage Against the World's (unit:100 million USD, %)

Source: UNCTAD

Table 4 BRICS Investment Flow from 2005 - 2015

Source: UNCTAD

Third, BRICS countries are still in a development phase, not yet in developed economies' phase. Right now, the average per capita GDP in BRICS countries is under 10,000 USD, of which Brazil, China and Russia are above 8,000 USD. Judging from World Bank's standards, they are already in medium-high income level. South Africa is above 5,000 USD, belonging to medium-income country, and India less than 2,000 USD, belonging to medium-low income country (Table 5).

Table 5 BRICS Per capita Income Level and Urbanization Ratio

Source: UNCTAD and International Monetary Fund

Fourth, the domestic development within the BRICS is unbalanced. Judging from per capita GDP, the difference in development level within the BRICS countries is increasing. From 2020, Brazil, China and Russia will enter beginning level of high-income country, while South Africa and India will keep medium and medium-low income levels. At the same time, the urbanization rate differs greatly within BRICS (see Table 5), from 32.4% in India to 84.2% in Brazil, which shows there's still a large room for cooperation among the BRICS. Judging from technology innovation, China and India's innovation efficiency ranks higher than total rank (see Table 6), especially China, which ranks third in the world. In comparison, the other BRICS countries rank behind world average, even countries like South Africa and Brazil. this means not only South Africa and Brazil are limited in their future development potential, also that if the present structure is not changed, the unbalance of BRICS inner development will keep increasing.

Table 6 2017 Global Innovation Index

Source: The Global Innovation Index 2017, WIPO.

Fifth, the future development potential of BRICS is huge. Since the 1990s, BRICS countries' economic growth is higher than global level and higher than developing countries and developed countries and other categories (Table 7).In the future, BRICS countries to keep sustaining an economic growth rate that excels other countries or regions.

Table7 BRICS GDP Growth Rate from 1992-2016(unit: %)

Source: UNCTAD