IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Resetting the Growth Engines of the BRICS Countries as a Reaction to the Global Crisis

Listed author(s):
  • Iulia Monica Oehler-Sincai

In the present paper, our main objective is to bring to the forefront two notable processes, as a result of the world financial and economic crisis. On the one side, we underline the increasing role of the emerging countries (especially that of China, Brazil, Russia and India) in the world economy and, on the other side, we underscore the remodelling of the patterns of economic growth and development in the case of the BRICS countries. The Russian Federation, Brazil and South Africa rapidly eased out of the recession in 2009, while China and India continued to record robust growth rates. Nevertheless, in 2012, one can remark the precipitate slowdown of the GDP growth in all the five analysed economies. This demonstrates that the emerging economies were not able to “decouple†from the world economy and, on the contrary, they were deeply affected by the adverse economic situation in the USA and the EU (especially the Euro Zone). At the same time, China’s economic slowdown negatively influences Brazil, Russia, India and South Africa, as China represents the largest trading partner for them, after the EU. At the same time, one should not ignore the actual weaknesses of these economies. For instance, inflation represents a “common vulnerability†of the BRICS. In this situation, the selection of the most viable instrument of monetary policy represents a veritable challenge for the authorities in these countries, as the economic growth should be stimulated but, at the same time, inflation has to be tempered. Besides, unemployment rate in South Africa is already at high levels. The fiscal deficit, as a percentage of GDP is excessive in India and South Africa and the public debt to GDP ratio is extremely high in India and Brazil. During the world financial and economic crisis, the authorities and companies, both public and private, concentrated their attention more and more on the internal markets, with a high absorption capacity. Without giving up exports and FDI as engines of economic growth, the administrative bodies at macro and microeconomic levels understood that the internal demand represents a complementary source of growth. In contrast with the most developed countries, which intensely resorted to austerity measures, the BRICS were able to adopt stimulus measures. Such Keynesian moves were possible, as the emerging countries entered the global crisis with strong macroeconomic and financial positions. As a matter of fact, the world financial and economic crisis erupted in a moment considered by the international experts as the “most prosperous†for these countries. The general measures adopted in order to stimulate the economy in the field of fiscal policy and monetary policy were combined with specific, sectoral ones. Such measures managed even to attenuate the negative effects of the global crisis at social level. Infrastructure development though public investment projects is used by the BRICS governments as one of the principal means to stimulate economic growth and jobs creation. Our paper concludes that, for the BRICS countries, the classical engines for economic growth like exports and inward FDI are complemented by additional growth engines: internal demand (spurred by the high level of remittances from abroad), the outward FDI, innovation and infrastructure development.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Institute for World Economy, Romanian Academy in its journal Revista de Economie Mondiala.

Volume (Year): 5 (2013)
Issue (Month): 1 (March)

in new window

Handle: RePEc:iem:journl:v:5:y:2013:i:1:id:2822000008747071
Contact details of provider: Postal:
Casa Academiei, Calea 13 Septembrie nr.13, sector 5, Bucureşti 761172

Phone: 004 021 4105596
Fax: 004 021 4105020
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iem:journl:v:5:y:2013:i:1:id:2822000008747071. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ionela Baltatescu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.