Type: Analysis
Pages: 9 | Words: 2564
Reading Time: 11 Minutes

First of all, in the scopes of this research paper, it is important to refer to the background of Brazil, Russia, India, and China grouping (BRIC) and then to discuss the effect of the strategic thinking BRIC has made for the Western companies.

The notion BRIC is the acronym for the grouping of four countries Brazil, Russia, India, and China. Such integration of four countries is mainly caused by the fact that all of them are on the same level of economical development, i.e. on the newly advanced stage. In 2001, the acronym BRIC was coined by Jim O’Neill in the document titled “Building Better Global Economic BRICs”. Currently, the acronym is widely applied as the symbol of global economic power shifting away from the developed G7 economical systems towards the developing countries. Some scholars consider that by 2027, the economic systems of BRIC would overcome G7. According to the information published in 2005, the only countries that were comparable to BRIC were South Korea and Mexico. However, their economic systems had been initially excluded due to the fact that they were more developed. Moreover, they were already the member countries of the OECD.

Analysis of BRIC countries

According to the approach developed by Goldman Sachs, the rapid development of BRIC countries would lead to the following outcome: by 2050, their economies would overcome the combined economies that are inherent of the currently wealthiest world’s countries. It is important to put an emphasis on the fact that more than 40% of the worlds’ total population and more than a quarter of the world’s land area are accounted to these four countries.

According to the opinion of Goldman Sachs, there is a probability of integration of BRIC countries into the economic bloc or formal trading association in the same manner as in the case with the European Union. It is important to take into account the fact that there is a set of indicators clarifying the issues that have been desired by BRIC from ‘alliance’ or ‘political club’, i.e. converting “their growing economic power into greater geopolitical clout”.

The first summit of the BRIC countries’ leaders was held in Yekaterinburg on June 16, 2009. As a result of this meeting, the declaration concerning the equitable, multipolar, and democratic world order establishment was issued. After the first meeting, the meetings in Brasília in 2010, in Sanya in 2011and in 2012 in New Delhi, India were held.

In accordance with the BRIC thesis, the fact of changing the political systems of Brazil, Russia, India, and China for embracing global capitalism has been recognized. According to the expectations of Goldman Sachs, India and China are to become the key suppliers of the manufactured services and goods on the global level. At the same time, Russia and Brazil are expected to become the dominant suppliers of raw materials. From the entire set of four countries, Brazil is the only polity that is able to continue supplying all elements of services and resources simultaneously. That is why, it is possible to state a fact that from the hypothetical point of view, the cooperation among four countries of BRIC is expected to be the next stage of relations, that, in turn, is mainly caused by the fact that the logical commodity providers have been formed by Brazil and Russia.

While taking into account general information concerning the BRIC alliance, it is possible to state a fact that the integration of economic, business, social, and cultural systems is happening at the moment. Such an approach is mainly caused and affected by the globalization process.

Impact of Globalization on the BRIC Countries’ Development

The term globalization is widely used today. Everyone understands it in different ways and there are several attitudes to this process. Many people consider it to be a positive process. Others think that it has a negative impact on the current society because it not only integrates different cultures but also is directed at the elimination of individual features of each culture.

Generally, globalization is the process of integration of regional economics, cultures, and societies via international communication, trade, and transportation systems. In several cases, this term is used in relation to economic globalization only and happens via international trade, migration, capital flows, etc.

For some people, globalization is associated with the Americanization process like McDonald’s and Coca-Cola. The main reason for that is the leading position of the US in the world in economic and military aspects and the view of the US culture as a powerful one (Lerman 2002, p. 46).

In this research, the impact of globalization on BRIC countries’ development will be investigated.

While discussing the impact of globalization on the world economy, it is important to refer to the history of globalization in this area. Globalization was caused by the raw materials deficit in some countries and their surplus in others. The world economy itself may be considered as the product of globalization (18th-20th centuries).

Currently, the globalization for economies of different countries means opportunities for finding a new market for their products in other countries and at the same time for getting raw materials, labor force and technologies from abroad. For sure, it may be considered to be a positive influence on the economic life of the country in case foreign products or services do not dump local products or services, their quality is on a high level and they do not contradict the local culture and traditions. Globalization as the process creates conditions for fair competition in the market. That allows keeping prices on a fair level and the quality of the product on the highest level.

As it was said above, globalization is a many-sided term that includes both economic and social aspects of human life. The main supportive forces of globalization are new technologies, foreign economical relations, international organizations, international police, business relationships, etc.

It is possible to outline two directions of the globalization process: economic (trade, investment, informational and communicational flows, technologies), and policy and institutional aspect (international standards development; liberalization of trade and capital market rules).

Globalization has a great influence on the social life of the BRIC countries. It changes the standards of life and work. That provides people with social protection, improvement of their working conditions, and increases the rate of employment. Another aspect of globalization concerning social life is a cultural one. It allows people from different social groups to get adapted to each other, prevent cross-cultural conflicts, and develop and support cross-cultural friendship and collaboration.

It is possible to state that the integration of cultures should have well-defined limitations in order to get new cultural directions and trends and to save unchanged individual traditions of each folk. In such a case, cross-cultural interrelation would have a positive impact on social life and would not become the sticking point for foreign affairs between countries. That is why the main goal of the globalization process should meet the needs and requirements of all social groups.

Poverty and wealth concentrations are the main problems of the globalized world. There are numerous opportunities that occurred with the globalization process, which may help to struggle against poverty. Situations can be observed in the Third World countries: swollen stomachs of hungry African children, 12-aged children working in a sweatshop, and living in unsanitary conditions. Today, equally with poverty, there are wealthy people who do not know in which manner they could spend their monetary sources. Some of them are doing charity or found charities in order to fight poverty. Besides, there are different state programs in rich counties that are directed at third-world countries’ development. Generally, the globalization process has made a positive impact on the struggle against poverty, but there are still many problems to be solved and numerous people who need to cover their basic needs, such as meals, clean water, and some accommodations.

Finally, the political situation in the world is also influenced by the globalization process because several world-leading countries tend to have advantages in all spheres of human activity like cultural life, social standards, and the armaments industry. For this purpose, they ‘use’ the countries that have raw materials, labor force, and technologies.

On the other hand, the positive impact of globalization on the political situation in the world is the international collaboration in solving conflict situations.

To conclude, it is important to pay additional attention to the importance of the globalization process nowadays because it provides BRIC countries with different economic, political, and social opportunities and we would like also to pay attention to the necessity of saving countries’ individual cultural traditions.

The Global Economy-Too Big to Fail

The next issue to be discussed in the scopes of this research paper is the fact that the global economy is too big to fail. First of all, in this chapter, it is important to refer to the background of the “too big to fail” notion.

It is the term that is mainly applied to the discussion of the public policy and regulation aspects in the US. This notion implies the fact that the impact of the failure of large and interconnected financial institutions would be disastrous for the economy, its stability, and its development. That is why the key responsibility of the governmental structures is to support large financial institutions in case some problems occur in these institutions.

The next issue to be discussed is the global economy and the globalization process in particular. In order to give a well-grounded answer to the question in terms of the hegemonic power of the governance importance, it is important to outline the background of the globalization process in all areas of human life. The analysis of the existing situation all over the world is required as well. The main aim of this chapter is to compare and contrast main theories of international relations and global governance and to apply this information to the real situation in the world globalization process concerning its impact on human life and safety in BRIC countries as well as on the cultural aspect of human life.

In this chapter, it is important to refer to Political realism as the most powerful theory of International Relations.

In order to outline the core aspects of this topic, it is important to pay additional attention to the background of this theory. It is possible to consider Political realism to be a theory of political philosophy. The main aim of this theory is the explanation, description, and prescription of political relations. According to this theory, power is considered to be the primary end of political action both in domestic and international relations. Power in the domestic arena of the BRIC countries should be maximized by politicians. In international relations, governments of these countries should tend to maximize the political and economic influence of their country. On the other hand, it is possible to consider this approach only as of the tendency to pursue power or self-interest.

Considering the realism of the international relations theory, it is possible to say that it is one of the leading schools of thinking in the international relations discipline. The core concept of realism is the prioritization of national interests and security over ideology, moral concerns, and social reconstruction (Rourke 2005, p. 16).

Morgenthau outlines six core principles of political realism for the BRIC countries. They are the following:

  1. Both politics and society are governed by objective laws.
  2. The concept of interest is the key factor for defining their own strategy in the landscape of international politics.
  3. Power is the key concept of interest and it is universally valid in social life.
  4. The moral significance of political actions and intentions is taken into consideration while applying power to some actions.
  5. The moral aspirations of a particular nation are not identified separately from the universal moral laws.
  6. Intellectual and moral attitude to political activity (Morgenthau 4-15).

That is why it is possible to state that globalization within BRIC countries requires a hegemonic power (the main aim of political realism). Nowadays, that hegemonic power is still the United States (at least militarily) and it will remain the case until transnational institutions become sufficiently powerful to assume complete control of global affairs. In any case, a hegemonic power does keep peace and it does ensure that rogue states recognize that there will be serious consequences if they act in an untoward manner, whether it happens in the realm of economics or in the realm of military belligerence. Of course, one can just as easily argue that the flip side of the above thesis, i.e. the belief that hegemonic powers are necessary for good governance on a global scale, is that hegemonic states or global institutions are also states/institutions that will confuse their own self-interest or imperialistic ambitions with larger objectives and interests of the international community. In other words, if it is good for the hegemon (be it the United States, or the World Trade Organization, or the IMF, or the United Nations Security Council), it is de facto good for humanity. Be that as it may, if there is no overarching power that keeps nations in check, they will scarcely do what is in the best interests of the international community, except by accident (Webb 2006, pp.73-92).

Globalization means that events in the developing world are now the preoccupation of the Western world. Bad investment policies or protectionism in one area of the globe can have repercussions elsewhere and it means that the global governance mechanisms need to be present to ensure that things work smoothly in the global economy (Underhill 2010, p. 552).

At the same time, it is important to recognize the fact that there has been a developing concept in the literature concerning the fact that multilateralism and a more aggressive policy of the United Nations Organization threaten to undermine any lingering vestiges of the state sovereignty. Recent history shows that the United Nations Security Council has been more active in authorizing peace-keeping and peace-building missions around the globe. Carol Glen (2006) is one of the scholars who believe that the international order can surely do a better job of eliminating unilateral action by powerful states, but it can only do so by ensuring that the United Nations is more forceful and efficacious at ensuring obeisance. Overall, globalization in the BRIC countries has been accompanied by an increased prominence in the role played by transnational organizations that now tell countries what they are supposed to do and how they are supposed to do it. It can be argued that a vivid description of the US assault on Iraq is a good instance of idealism in action.

Another argument raised in the journal Strategic Direction is that globalization has raised the spectrum of greater interaction between small and large businesses where asymmetries of power exist. Powerful global firms now have the capacity to entirely destroy local firms, which means that regulations need to be in place to govern these exchanges. Of course, in the neo-liberal world, there is also the expectation that smaller firms need to be more innovative if they wish to survive as globalization brings the large and the small together (Straus 2007, p. 47-63).

To conclude, it is important to make an emphasis on the fact that powerful nations (BRIC countries in particular) or transnational organizations keep the global order, though they can easily serve the interests of the privileged. Since globalization brings people together, =it requires a global hegemon and that is why, many scholars believe in its necessity, even if they argue over the exact way things should be carried out.

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