These emerging economies are the fastest growing economies and are characterised by their movement away from agriculture and recent industrialisation. The main countries are known as the BRICs, standing for Brazil, Russia, India, and China (sometimes South Africa is also included). All of these are members of G20 and have potential for innovation, especially in renewable energy.
The distinguishing feature of the BRICs is their transformation of global trade relationships. Between 2000 and 2010, they were responsible for 1/3-1/2 of global economic growth. They suffered less than the rest of the world in the 2008-9 recession than the developed economies, but the growth rates have slowed after 2011.
Brazil à Relies on selling commodities such as iron ore, soya, coffee and sugar. Falling demand and volatile commodity prices has slowed its growth rate.
Russiaà Experiencing problems such as sanctions from the West and a depreciation of the rouble.
India à Had a rapid growth spurt which then slowed (it is expected to improve in future). The income per capita is still very low.
China à Growth rates as high as 10%. It was led by exports but relies on the rest of the world to buy it. Eurozone recession reduced demand for their exports
INDICATORS OF GROWTH
- GDP per capita
- Literacy
- Health
- Human Development Index (HDI)
GDP per capita is the GDP divided by the population and gives a rough idea of how wealthy a country is. It shows the average output (income) per person. The problems with this are it does not consider income distribution, poverty, the different costs of being in a country (expenses will differ) or the purchasing power of citizens.
Literacy is measured through the percentage of adults that can read and write. Another indicator could be the proportion of people that have attended primary school .
Health can be measured through the life expectancy which is linked to access to healthcare. Another indicator can be the proportion of doctors to patients.
Human Development Index (HDI) is a much broader comparison as it looks at life expectancy, education and living standards. This helps create a bigger picture as a country may have a low GDP and good education. The main components are education, life expectancy and standard of living. This creates a value between 0 and 1, the higher values are indicative of high economic development. This does not consider the political freedoms of citizens, distribution of income, the environment or the level of poverty.
The average income can be measure either through mean or median of incomes.
The mean income of the country is the total income of an economy (GDP) divided by the number of people of working age in the country (the population). The median income is the ‘middle value’ of all the incomes sorted into ascending order. Quartiles can also be used, this divides the population into four groups to compare the richest quartile (25%) with the poorest quartile. You can also use deciles and quintiles.
Changes will affect the mean and median differently e.g. growing inequality of income can cause the mean income to rise but the median income to decrease. Many economists argue that the median income is better as it will not be skewed by a small number of high-income earners.