The world is increasingly changing into a state of multi polarity due to the emergence of new economic powers particularly the BRIC. BRIC is a symbol that is used in reference to Brazil, Russia, India and China which are considered to be newly emerging economies or emerging markets and are at the level of newly advanced economic development.
We will write a custom Essay on BRICs and Mega Trends in World Culture specifically for you
301 certified writers online
These symbols are used as a symbol of paradigm shift in the global economic power from the G7 economic group (Renard, 2009). The rate of economic growth in the BRIC countries will supersede that of the developed countries eventually.
The global influence of the G7 is slowly diminishing due to the constant rise of the BRIC. Whereas China and India are the fastest growing economies among the BRIC, Brazil and Russia are the least emergent economies in the BRIC (Renard, 2009).
The BRIC countries account for approximately 42% of the world’s population and 26% of the world’s Gross Domestic Product (GDP). They experience growth in all sectors from retail and agriculture to manufacturing. Consequently, BRIC have a total land area of 29% (Economy Watch, 2011).
Characteristics of India and China
These countries have a larger population of middle class with great purchasing power parity hence a boosting demand. They both have the largest number of working population and they experience the fastest growing economy in the world.
To open up their economies, India and China have reduced their regulatory and legislative burden of operating businesses particularly in the retail sector (Mangalorkar, Kuppuswamy, Groeber, n.d.). These two countries have maintained their stable economic growth from the 1990s.
The only disparity between these two countries is that the economic growth rate of China is higher while on the other hand the economic stability of India is high (Mizuho Research Institute, 2006). Between the year 2002 and 2008, the economic growth rate of China was 10% while that of India grew at 8%.
Strengths and Weaknesses of China and India
Among the strengths of China and India are that they have a lot of agricultural and mineral resources, also their commodity markets is expanding. India’s economic policies are considered stable in the world, its robust economy enabled India to weather the storm of the global financial crises. This has been associated with its rigid banking policies and minimum bureaucratic crisis and its protectionist policies.
The disconnectedness of India’s state dominated financial system with the foreign market proved instrumental in the global financial crisis (Molano, 2009). China and India allow the influx of cheap goods form the OECD countries; these have enabled them to pin down inflation and interest rates and hence opening up their domestic markets for western countries.
China in particular have placed emphasis on exporting their goods cheaply thus placing competitive pressures on the manufacturers in higher cost OECD. India on the other hand has posed challenges to Anglophone countries like US and UK by increasing its technological capability in the IT sector (Hawksworth, 2006).
The following are the weaknesses China and India: first is that they have volatile markets, secondly, their macro-economic policies are unstable. Natural disasters have the potential of bringing down economies; this is because their economies depend on rain fed agriculture and hence vulnerable to natural calamities which might slow them down.
It is also expected that China will experience problems in the future due to its one child policy. China’s open economic structure was exposed by the contraction of the US economy and the collapse of trade finance in the US. China bore the brunt of the global economic crisis due to the nature of their economy which is export oriented and investment driven (OECD, 2009).
Current and Projected rise by 2050
Currently, the BRIC account for 15% of G6 GDP but it is projected that by 2050, BRIC economies could supersede that of the G6 in US dollars. The current demographic trends and the rate of economic growth of the BRIC is between 5-10 percent annually with India being expected to be the fastest growing economy in the world.
This is based on the above case projections in 2050 while China is expected to be the second. Consequently, by the same year, Brazil will be expected to be at par with Japan. The declining working age population of Russia will likely slow down its economy and by 2050 it will be similar to that of France. India’s economy could overtake that of US and China combined by 2050 (Wilson & Purushothaman, 2003).
Get your first paper with 15% OFF
Impact of India and China on World Culture
The characteristic feature of India is the age old caste system. Caste is upheld and protected by the laws of the country and they determine individual’s social, historical and economic standing in the society. Caste is still relevant in politics, business and marriage.
India has the culture of hospitality and loyalty. Indian business environment is different altogether; they are managed using the top down approach. The parent company determines the culture of the developing companies (Miller, 2010).
With regard to the Chinese culture, the teachings of the Confucius are greatly influential on the Chinese society. These teachings emphasize morality in practical life. It is believed that the Chinese society is based on equal relationships, especially between father and son, ruler and subjects, husband and wife, these guarantees harmony and stability.
In China, group is very important than individuals. The dynamics of the Chinese work environment is equated to the extended family and the boss is considered a patriarch, where the boss is held responsible and not the employee. Chinese work environment is based on hierarchy and it is only the bosses or managers who get senior positions (Miller, 2010).
China and India pursue a different diplomatic style from that of the OECD members, their value neutral approach have enabled them to court markets where OECD countries are reluctant to venture (World Economic Forum on Africa, 2006).
Trends in World Cultures and Implications for International Managers
Culture is very important in international business; culture helps in the organization of the world. Understanding of world culture is necessary to eliminate ethnocentrism, which is the belief that ones culture is superior to other cultures (Jain, 2006). Culture affects different management functions like planning, organizing, directing and supervising.
Knowledge of the impact of cultural differences is critical to international business success and will help companies built international competencies and will enhance their competitiveness in the global market (World Business Culture, n.d.).
BRIC countries have experienced unprecedented economic growth. This is largely associated with well designed economic program based on trade liberalization, constant flow of foreign direct investment and increasing domestic consumption.
With the going unity of the BRIC, they can design their economic order between themselves; this is in the sense that China can dominate the manufacturing sector, India in the services sector and Russia and Brazil in supply of raw materials.
Economy Watch. (2011). The BRIC Countries: Brazil, Russia, India, China. Economy Watch. Web.
Hawksworth, J. (2006). The world in 2050: How big will the major emerging market economies get and how can the OECD compete? Emerging Economies. Web.
Jain, S.C. (2006). Emerging economies and the transformation of international business: Brazil, Russia, India and China (BRICs). New York, NY: Edward Elgar Publishing.
Mangalorkar, R., Kuppuswamy, R & Groeber, M. (n.d.). The BRIC Promise. Atkearney. Web.
Miller, H. (2010). Culture and work styles in the BRIC countries. Herman Miller. Web.
Mizuho Research Institute. (2006). Comparative analysis of the BRICs. ESRI. Web.
Molano, W. (2009). Economic crisis and the BRIC countries. The Journal of International Business & Law. Web.
OECD. (2009). Globalization and emerging economies: Brazil, Russia, India, Indonesia, China and South Africa. New York, NY: OECD Publishing.
Renard, T. (2009). A BRIC in the world: emerging powers, Europe, and the coming order. Egmo Institute. Web.
Wilson, D & Purushothaman, R. (2003). DreamingWith BRICs: The Path to 2050: Global Economics Paper No: 99. World Forum. Web.
World Economic Forum on Africa. (2006). The impact of China and India. Members Forum. Web.
World Business Culture. World Business Culture. World Business Culture. Web.