14.1 Emerging Economic Powers and Shifting Global Order

The BRICS nations—Brazil, Russia, India, China, and South Africa—are reshaping the global economy. These emerging powers, along with countries like Mexico and Indonesia, are shifting economic influence from developed to developing nations, intensifying competition and driving resource demand.

Economic reforms, young populations, and natural resources fuel the rise of emerging powers. They're embracing market-oriented policies, leveraging demographic advantages, and attracting foreign investment. This shift is changing the balance of power, challenging existing institutions, and creating new opportunities for cooperation and conflict.

Emerging Economic Powers

Key emerging economic powers

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• BRICS countries represent Brazil, Russia, India, China, and South Africa
  • Collectively account for a significant share of global GDP and trade volume
  • Exert increasing influence in global economic decision-making bodies (G20, IMF, World Bank)
• Other emerging economies include Mexico, Indonesia, Nigeria, and Turkey (MINT countries)
  • Characterized by rapidly growing economies, large populations, and increasing global economic influence
• Impact on global economy involves shifting economic power from developed to developing countries
  • Intensify competition in international markets across various sectors
  • Drive growing demand for resources and commodities (oil, minerals, agricultural products)
  • Create potential for increased foreign direct investment and trade opportunities

Factors in emerging power rise

• Economic reforms and liberalization policies adopted by emerging powers
  • Embrace market-oriented policies to promote economic growth and competitiveness
  • Increase openness to foreign investment and trade through reduced barriers and regulations
• Demographic advantages of large, young, and growing populations
  • Benefit from expanding middle class with increasing purchasing power and consumption
• Abundant natural resources in emerging economies
  • Possess significant reserves of minerals, oil, and other commodities (rare earth elements in China, oil in Russia)
  • Attract foreign investment and drive economic growth through resource extraction and trade
• Technological advancements and rapid adoption of new technologies
  • Foster innovation and competitiveness in global markets (e-commerce in China, IT services in India)
• Geopolitical factors, including strategic location and regional influence
  • Leverage political and diplomatic clout in international affairs to advance economic interests

Shifting Global Order

Implications of shifting economic order

• Changing balance of power in global economy
  • Observe declining relative economic power of traditional Western powers (United States, European Union)
  • Witness increasing influence of emerging economies in global decision-making bodies (G20, IMF, World Bank)
• Potential for increased cooperation among nations
  • Identify opportunities for collaboration on global issues (climate change, poverty reduction, sustainable development)
  • Recognize formation of new alliances and partnerships among emerging powers (BRICS, AIIB)
• Challenges to existing international institutions and norms
  • Face questioning of Western-dominated global governance structures (United Nations, WTO)
  • Encounter calls for reform and greater representation of emerging powers in international organizations
• Geopolitical tensions and rivalries arising from shifting economic power
  • Experience competition for resources, markets, and influence (access to oil, control of trade routes)
  • Navigate potential for conflicts and disputes over territorial claims and regional dominance (South China Sea, Arctic)

Challenges of changing economic landscape

• Increased economic volatility and uncertainty in global markets
  • Manage potential for trade disputes and protectionist measures (tariffs, subsidies, non-tariff barriers)
  • Address environmental and social impacts of rapid economic growth (pollution, resource depletion, income inequality)
  • Ensure inclusive growth and equitable distribution of economic benefits within and among countries
• Expanding consumer markets and business opportunities
  • Tap into growing middle class and increasing purchasing power in emerging economies
  • Explore potential for trade, investment, and economic cooperation with emerging powers
• Collaboration on global public goods and addressing transnational challenges
  • Promote knowledge sharing and technology transfer between developed and emerging economies
  • Foster cooperation on issues such as climate change, global health, and international development
• Need for adaptive global governance in the face of shifting economic order
  • Reform international institutions to reflect the changing balance of economic power (IMF quota reform, UN Security Council expansion)
  • Develop new mechanisms for cooperation and conflict resolution among emerging and established powers
  • Promote inclusive and sustainable economic growth and development through multilateral initiatives (Sustainable Development Goals, Paris Agreement)