Many see the BRICS countries as emerging economies with amazing growth set to lead the world economy. But a look at their recent performance suggests challenges ahead.
The largest economy in Latin America is experiencing its worst recession since the 1930s.Prices of commodities like oil, sugar and coffee have crashed since the beginning of last year. And with surging inflation, consumer confidence has plummeted.
Unemployment is on the rise and making things worse, a major corruption scandal, ongoing political turmoil, and the outbreak of Zika virus, have all plagued Brazil.
Oil and gas account for more than 60% of Russia’s exports, making the sharp decline in world oil prices bad news for the Russian economy. The Russian ruble has much depreciated, as a result of both the price decline and Western economic sanctions. But experts still believe a full-blown collapse is unlikely as the country pivots toward other options.
With one of the world’s highest GDP growth rates of 7.6%. India’s major sectors are agriculture, IT and financial services. And the government is keen to attract foreign investment for its infrastructure projects and rural development.
However, bureaucracy, corruption and red tape have hampered further growth, and challenges can be found throughout many levels of government.
Today the world’s second largest economy sees its GDP surpass 10 trillion US dollars. China now finds itself facing new challenges.
Shifting from the old development model which heavily relies on manufacturing and investment to a more knowledge-based economy and service-driven growth.
Innovation, environmental issues and bridging existing income gaps are not things that can be done over night however.
The struggle in attracting foreign investors. This is the main challenge South Africa faces.
But it also has problems with infrastructure, including electrical blackouts as well as industrial strikes that slow production and discourage investors. Violent crime and corruption are widespread. Unemployment levels are high, and highly skilled labor is in short-supply. Yet immigration laws make it difficult to hire foreign workers.