There is no doubt that the BRIC countries [Brazil, Russia, India and China] - the world's four largest emerging economies, have enormous economic and investment potential, especially in the technology industry. According to Euromonitor International, if the BRIC countries can maintain their current growth rates, the combined economies of the four global powers may have more value than the G6 [Germany, France, Italy, Japan, the United Kingdom and the United States]. In the past decade, gross domestic product [GDP] and personal disposable income [PDI] have grown exponentially in the BRIC countries. This growth has driven many public-private partnerships [PPPs] in each country, making foreign direct investment [FDI] a strong business investment for any large company. PPP transactions are often complex, economically demanding, and the project is very time consuming for several years. However, under appropriate economic conditions and appropriate business strategies, they can bring significant benefits to the private sector, consumers and national governments. Each country may present different risks, and the success of these projects depends to a large extent on the country's ability to deal with such risks and minimize project disruptions. Our paper examines the comparative risks, opportunities, overall economic environment, industry market potential and structure of each BRICS country, and ultimately suggests which country to invest in the technology sector.
Brazil
According to data compiled by the Economist Intelligence Unit, Brazil currently scores "BBB" in its overall national risk assessment. This is known as the "investment grade status. According to this assessment, Brazil is considered a low-risk medium-risk country, investing according to institutional ratings. Brazil is rich in natural resources such as quartz, diamonds, chromium, iron ore. Bo Media said that its natural wealth has pushed this country of 200 million people to the top of the global market, including phosphate, petroleum, mica, graphite, titanium, copper, gold, petroleum, bauxite, zinc, Tin and mercury. Brazil's economy has risen from 16th in 1980 to 6th today. "The Brazilian government's huge debt and economic deficit in the 1990s promoted private investment in various industries. The Brazilian privatization program led to privatization from 1990 to 2002. These companies estimated an increase of $10.5 billion in national income and investment opportunities, especially in the technology-driven telecommunications industry.
Reports about the future of the Brazilian economy vary widely. Despite the unstable performance of the five regions of Brazil this year, Brazil's economic outlook is quite optimistic. The Wall Street Journal recently reported that Standard & Poor's downgraded Brazil's prospects from "stable" to "negative." According to the Economist Intelligence Unit, "long-term growth forecasts predict that annual GDP growth will be faster [3.8%] over the past 19 years than in the past 25 [2.8%]. Improvements in infrastructure and education, trade expansion, broader multinational operations The reduction of the debt burden and the development of Brazil's huge oil reserves will slow the growth of labor and help maintain labor productivity growth of 2.7%."
The current political focus Brazil is rapidly turning to next year's election. President Dilma Rousseff [leftist Partido dos Trabalhadores] became the first female president in national history in 2010, and she announced that she would run for another four years in February this year. Despite the corruption scandal, weak economic growth and rising inflation, President Rousseff is still very popular, especially since the unemployment rate is still as low as 5.8% compared to historical trends. In terms of political risk, Brazil is at a moderately stable level compared to other BRIC countries. According to the Economist Intelligence Unit, "The campaign for the Brazilian election in October 2014 has begun. The popularity of President Dilma Rousseff helps to narrow the scope of sensitive reforms and pollute the policy environment. ". In addition, President Rousseff was voted "Forbes" magazine as the world's most powerful woman #2. Due to its stable political and economic environment, many international investors are attracted to Brazil; however, they do face very high levels of bureaucracy, taxation, crime and corruption, which often far exceed the domestic market.
Brazil's economy is slowly recovering from the 2011-12 recession, but Brazil's potential growth rate is much lower than in 2004-10, when it grew 4.5% annually. The Economist Intelligence Unit said, "The financial services industry will grow faster than the overall interest rate, but with the slowdown in credit growth, the financial services industry will lose some vitality. Since 2003, credit has more than doubled, growing by GDP. In February 2013, it was 53%."
"In terms of financial risks, the Brazilian financial system is facing the impact of volatile international markets, especially commodities and capital markets. In the past decade, Brazil's financial industry assets have doubled, especially due to the expansion of the securities and derivatives markets. And a lot of investment from home and abroad.
According to the Economist Intelligence Unit, "The population is estimated at 195 million in 2012 and GDP is 2.3 trillion US dollars. Brazil has the largest financial services market in Latin America. But income and wealth are still highly concentrated. The continuing trend of business formalization and labor It will support financial deepening. The increase in income will increase demand for financial services, but the labor market dynamics in Brazil are becoming less favorable than in the previous decade."
Some economists believe that Brazil may be a victim of its own success. The total public debt ratio remains high, forcing the government's borrowing demand to remain high. According to Dimitri de Mecas, assistant director of the Monetary and Capital Markets Department of the International Monetary Fund, "the rapid credit expansion in recent years has supported domestic economic growth and broader financial inclusion, but may also create vulnerability. Despite this, a range of additional infrastructure improvements, population growth, abundant natural resources and the expected investment in the upcoming 2014 World Cup and 2016 Olympic Games will enable Brazil to remain at the top of its global financial strategy for the next few years.
According to the Economist Intelligence Unit, the average industry risk rating for the technology industry in Brazil in 2013 was 43.5. To test risk and return, we combine it with the economic intelligence unit business environment score. Considering the 1-10 rating, we multiply it by 10 for comparison in this article; Brazil gets 66.9, which is a great opportunity in the technical field.
Russia
According to data compiled by the Economist Intelligence Unit, Russia currently scores a "C" value [54 points] in the overall risk assessment. According to this assessment, Russia is considered a moderately risky country with modest investments. Some of these risks include "administration of opacity and corruption, and over-reliance on the judicial institutions that produce and operate poorly".
According to the Economist Intelligence Unit, Russia has a "C" value [55 points] in terms of political risk. However, President Vladimir Putin has seen various protests under his many conditions. This country has not flourished as it has been for decades after the Cold War. It is obvious that the government is now intervening more in the economy, leading to more workers being out of the middle class. According to the Economist Intelligence Unit, "there are signs that the disillusionment of ordinary Russians is spreading." Because the country may lack political stability, investors and other countries do not want to continue to do business with Russia.
According to the Economist Intelligence Unit, Russia scores "C" [58 points] in terms of financial risk. Russia lacks substantial government involvement in the banking industry; therefore, it is difficult to carry out any form of reform of the baking industry. In addition, the status of the banking industry and its supervision of the government are also uncertain. When investors and business partners cannot trust the country's central bank, it can cause many problems for the country. Getting external finance and weakening the ruble will certainly not attract companies to do business in Russia.
Like other countries in the world, Russia has suffered from an economic crisis that has had a ripple effect on the entire global market. In 2009, GDP fell by 7.8%, which affected the country to a large extent. Russia's external demand for various commodities has fallen. Although the economy and GDP fluctuated in the following years, Russia is still not considered a favourable investor, in part because of the huge uncertainty in the political sector and the lack of confidence and financial stability in the government.
The average risk of the Russian technical sector is 52.475, while the country's business environment score is 58.6. This combination of high risks and low opportunities makes Russia the most disadvantaged country for the BRIC countries to invest in technology based on current economic and risk factors.
India
The Economist Intelligence Unit "estimates that real GDP growth [by expenditure] in the 2012/13 fiscal year slows to 3.4%." The business intelligence sector believes that the Indian economy has bottomed out. this country......
Orignal From: Technology industry risks in the BRIC countries - Where should your company invest in 2013?
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