Question

Answer each of the following questions on the promise and peril of economic integration.

What will a potential shift of the economic center of gravity from the traditional G-8 countries—Canada, United States, Japan, Germany, UK, France, Italy, and Russia (currently suspended over its annexation of the Crimea)—to the BRICS countries mean?

Does it signal hope for a new wave of economic growth and new engines of regional prosperity to drive the global economy, or does it signal the fading importance of Europe and the United States?

Will the rise of the BRICS countries signal the rise of middle classes within those countries or a further expansion of inequity in income distribution?

How can governance challenges in each of the BRICS countries derail their economic growth?

Resource challenges? Demography and population? The threat of conflict?

Answer 1

a. The potential shift of the economic center of gravity from the traditional G-8 countries to the BRICS countries mean that growth rate of the developing nations is surpassing the growth rate of the developed nations. This is good for the global economy as it prevents concentration of power in the hands of few nations of the world and leads to diversification of power.

b. This signals hope for a new wave of economic growth and new engines of regional prosperity to drive the global economy as it leads to shift of power in the hands of new nations which will lead to a new wave of economic growth in the country.

c. The rise of the BRICS nations will lead to fall in the level of inequity in the income distribution in the country and will signal the rise of middle class within those countries because as overall prosperity in the nation rises the level of inequality in the nation falls.

d. Governance challenges in the form of increased corruption can hamper the economic growth of the nation because this will not allow the economy to grow to its potential level. The lack of resources in the developing nations will also prevent increased economic growth of the nation. Increased dendity of population reduces the level of GDP per capita in these nations . The threat of conflict also diverges the main attention of the government from governance and policy formulation for increased economic growth to conflict resolution and this also leads to fall in economic growth of the nation.