Whatever happened to the BRICs Trajectory Trends Breakfast

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Whatever happened to the BRICs? Trajectory Trends Breakfast February 2016

Whatever happened to the BRICs? Trajectory Trends Breakfast February 2016

Introduction

Introduction

What are the BRICs?

What are the BRICs?

The BRICs: Origins BRIC Countries in 2001 Very large in terms of size &

The BRICs: Origins BRIC Countries in 2001 Very large in terms of size & population Rapidly expanding domestic markets Untapped labour reservoir Most important countries in their respective regions Had displayed impressive growth figures before 2001 Were undergoing military modernisation efforts to preserve strategic interests Source: CNBC Finance

Shifting Balance of Power Share of Global GDP, Emerging vs Advanced Economies 100% 90%

Shifting Balance of Power Share of Global GDP, Emerging vs Advanced Economies 100% 90% Advanced Emerging/developing 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 IMF WEO April 2016 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

The financial crisis G 20 – Twice as democratic as G 8?

The financial crisis G 20 – Twice as democratic as G 8?

Current state of play

Current state of play

Cracks in the BRICs

Cracks in the BRICs

Significant disparities between GDP per capita in each BRIC IMF WEO GDP Growth 2014

Significant disparities between GDP per capita in each BRIC IMF WEO GDP Growth 2014 -2015 and Projections to 2017 Very sharp divergence in GDP Per Capita – Current US $ Dollars (2014 Data) 14, 000 12, 000 Brazil China India 8% 12, 735 11, 726 6% 10, 738 10, 000 4% 7, 590 8, 000 2% 6, 000 0% 4, 000 -2% 1, 581 2, 000 0 -4% -6% World IMF WEO 2015 Russia Brazil China India 2013 2014 2015 2016 2017

Demographic Divergence Total population growth by country, annually for 2013 -2030 25% 20% 15%

Demographic Divergence Total population growth by country, annually for 2013 -2030 25% 20% 15% 10% China 5% Brazil India 0% Russia -5% Poland Ukraine -10% -15% -20% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: UN World Population Prospects, 2015

Age dependency ratios in BRIC Countries Over 65 s as a % of working-age

Age dependency ratios in BRIC Countries Over 65 s as a % of working-age population Ukraine 21. 8 21. 4 Poland Russia 18. 8 India 8. 4 China 12. 5 Brazil 11. 0 0 World Bank Data, 2014 5. 0 10. 0 15. 0 20. 0 25. 0 30. 0

Technologically diverse % using the internet (all people) Source: ITU 2013

Technologically diverse % using the internet (all people) Source: ITU 2013

Distinct Domestic Realities CSIS Report 2015

Distinct Domestic Realities CSIS Report 2015

Trust in Political and Media Institutions plunging % saying they trust each group/source 80%

Trust in Political and Media Institutions plunging % saying they trust each group/source 80% Russia China India Brazil 69% 70% 61% 60% 51% 49% 50% 43% 40% 31% 30% 20% 31% 26% 20% 28% 21% 29% 26% 24% 41% 33% 29% 18% 7% 10% 0% Multinational business leaders Source: Trajectory Global Foresight 2014 -2015 National business leaders Politicians Newspapers TV

No convergence between national priorities Fighting rising prices Brazil China India Protecting freedom of

No convergence between national priorities Fighting rising prices Brazil China India Protecting freedom of speech Russia Brazil 50% China India Russia 25% 40% 20% 35% 30% 15% 20% 15% 10% 5% 5% 0% 0% 1989 -93 1994 -99 1999 -04 2005 -07 2011 -12 2013 -14 2015 Source: World Values Survey/Trajectory Global Foresight 1989 -2015 1989 -93 1994 -99 1999 -04 2005 -07 2011 -12 2013 -14 2015

What next?

What next?

Fragility of the BRICs as a political project Commercial Interests Harmed by a Fellow

Fragility of the BRICs as a political project Commercial Interests Harmed by a Fellow BRICs Member (no. of occasions) since 2010 Russia "Conflicting interests and the indisputable political, social, and cultural differences among the group's members have kept the BRICS from translating their economic force into collective political power on the global stage” 199 South Africa 239 Brazil 263 India 269 - Center for Strategic and International Studies October Report (2015) China 707 0 Source: Global Trade Alert 100 200 300 400 500 600 700 800

The continued importance of advanced markets Rank GDP per Capita (2016) Rank Ease of

The continued importance of advanced markets Rank GDP per Capita (2016) Rank Ease of Doing Business (2015) Rank Innovation Index (2015) 1 Luxembourg 1 Singapore 1 Switzerland 2 New Zealand 2 UK 3 Norway 3 Denmark 3 Sweden 4 Qatar 4 South Korea 4 Netherlands 5 Macao SAR 5 Hong Kong 5 US 6 UK 6 Finland 7 Iceland 7 US 7 Singapore 8 Ireland 8 Sweden 8 Ireland 9 Denmark 9 Norway 9 Luxembourg 10 Singapore China 10 Finland 10 Denmark 51 Russia 29 China 71 73 Russia 84 China 48 Russia 76 Brazil 116 Brazil 70 Brazil 142 India 130 India 81 India Source: IMF, World Bank, Mc. Kinsey, 2016

Digital Globalisation Source: Mc. Kinsey Global Institute, 2016

Digital Globalisation Source: Mc. Kinsey Global Institute, 2016

Away from acronyms

Away from acronyms

A richer understanding Happen later Values, life events and national wealth South Korea Italy

A richer understanding Happen later Values, life events and national wealth South Korea Italy Happen earlier Life events Australia Slovenia Sweden France Poland Spain Tunisia Algeria Japan Cyprus Libya Germany Jordan Singapore Norway Finland Switzerland USA Netherlands Morocco Chile Lebanon Serbia Malaysia Romania Iran Bulgaria Iraq UK Rwanda Ukraine New Zealand Argentina Belarus Ghana South Africa Kazakhstan Qatar Armenia Pakistan Egypt Russia Peru Uruguay Kyrgyzstan Turkey UAE India Canada Yemen Trinidad and Tobago China Philippines Estonia Thailand Nigeria Mexico Viet Nam Brazil Moldova Azerbaijan Colombia Indonesia Guatemala Ethiopia Georgia Ecuador Zimbabwe Uzbekistan Tanzania Uganda Burkina Faso Mali Bangladesh Bubble size = GDP per capita More traditional Values/outlook (16 -35 s) More modern

UK Implications

UK Implications

Trajectory 22 Upper Ground, London, SE 1 9 PD + 44 (0)20 8004 4869

Trajectory 22 Upper Ground, London, SE 1 9 PD + 44 (0)20 8004 4869 trajectorypartnership. com @Trajectory. Tweet