Goldman Sach's Forecast for BRIC Economies Assignment

Goldman Sach's Forecast for BRIC Economies - Assignment Example 2000, p.42). In stark contrast to the position in the United States, the Japanese economic 'miracle' has been founded on principles completely alien to classic economic theory. Where the free play of market forces dictates vigorous competition, the Japanese economy is managed on the basis of consensus; where the Anglo-American model prescribes minimal government intervention, the Japanese economy flourished precisely because the state has intervened massively to safeguard domestic markets from foreign competition and to support the establishment, growth and export potential of key industry sectors, including the advanced technology sectors. If the break-up of the Soviet Union constitutes the most dramatic development of the post-Second World war era, arguably the most significant has been the gradual but steady evolution of the European integration (Anderson et al. 2000, p.62). The establishment of the European single market in January 1993 superseded the laws of the first 12 member states and it has been estimated that 60 million border-crossing regulations were abolished. As of 1996, the total 15 country GDP had increased by some $150 billion and employment rose by some 300,000-900,000 (Anderson et al. 2000, p.64). Unfortunately, as Goldman Sachs put it, these three of the world's largest economies may look quite differe... If things go right, in less than 40 years, the BRICs economies together could be larger than the G6 in US dollar terms. By 2025 they could account for over half the size of the G6. Of the current G6, only the US and Japan may be among the six largest economies in US dollar terms in 2050 (Wilson and Purushothaman 2003, p.1). This article briefly presents the implications BRIC countries have to face if they are to realize Goldman Sachs' prediction by 2050. this article will also deal on some of the BRICs' potential that would aid them to be the next economic superpowers. The Context of BRIC Countries Wilson and Purushothaman (2003, p.4) state that the progress of the BRICs will be critical to how the world economy evolves. If these economies can fulfill their potential for growth, they could become a dominant force in generating spending growth over the next few decades. Another characteristic of the BRIC countries' economic development is that generally their economic growth has fluctuated more strongly than has been the case for the developed countries. This tendency magnifies the significance of the BRIC countries to the global economy, since the fluctuations in their growth explain a relatively larger share of the global cyclical fluctuations than their economic weight would indicate (Jensen and Larsen 2004). Taking each of the BRIC economies briefly, the following are the implications that each country would experience if they are to attain the Goldman Sachs' prediction: Brazil. Over the next 50 years, Brazil's GDP growth rate will average by 3.6%. The size of Brazil's economy will overtake Italy by 2025; France by 2031; UK and Germany by