The Role of the BRICS in the Global Economy

Originally coined as a term during the early 2000s, BRIC refers to the global economic weight of Brazil, Russia, India, and China. The term was popularized through financial reports developed by the investment bank Goldman Sachs and it foresees the economic importance that these four nations will carry on the world stage during the coming decades. The BRIC economies stand in contrast to the Group of seven (G7) of the world’s most developed and industrial economies, since the BRIC are still considered as being developing economies. In 2009, the four respective governments embraced the idea of the BRIC and institutionalized their cooperation at a summit held in Russia. Later, in 2010, South Africa joined the group, which changed to BRICS, and ever since they have held a yearly summit. The 2017 BRICS summit will be held in China during the month of September. Currently, the BRICS include two of the world’s three largest economies, notably China with an annual gross domestic product (GDP) of over US$21 trillion and India with a GDP of almost US$9 trillion. Likewise, the BRICS account for approximately 25% of the global economy, while the G7 nations represent about 45%. In some economic and academic literature, authors refer to the BRIICS, which also incorporates Indonesia. However, Indonesia has not been formally incorporated into the economic and political bloc. This article explores the macroeconomic characteristics of South Africa.

The Role of the BRICS in the Global Economy

The Republic of South Africa is a large country at the crossroads of the southern Atlantic and Indian Oceans. South Africa has a total territory of more than 1.2 million square kilometers, which is almost twice the size of Texas. Geographically, hills and an inland plateau along with a long coastline of approximately 2.800 kilometers dominate the country. South Africa has a total population of more than 54 million citizens, almost 65% of which live in an urban setting, notably the cities of Johannesburg, Cape Town, Durban, and Pretoria. Currently, the South African annual GDP is approximately US$720 billion, making it the only African country to be a full member of the Group of twenty (G20) largest economies in the world. Similarly, South Africa’s national economy has experienced positive, though sluggish, growth in recent years. The national economy is divided into 3% agriculture, 29% manufacturing, and 68% services. Meanwhile, the agriculture industry utilizes some 78% of the national territory, while another 8% is forested. Likewise, the South African agricultural industry employs 5% of the national labor force, while manufacturing employs about 18%, services employ another 70%, and the remaining sector of the labor force works in the informal economy.

In terms of natural resources, South Africa has minerals, such as gold, platinum, chromium, iron, manganese, nickel, and phosphates, as well as coal, uranium, diamonds, copper, salt, and natural gas. Within manufacturing, the national industry is focused on mining, automobiles, metallurgy, machinery, textiles, iron & steel production, chemicals, fertilizer, food, and commercial ship work. Meanwhile, the country’s agricultural industry has as main products corn, wheat, sugarcane, fruits, vegetables, beef, poultry, wool, and dairy products. Finally, in terms of trade, South Africa’s main partners are China, the United States, Germany, and India, amongst others.

(Read more about Trade and Agricultural Production in Romania)