PhD student, Kaimashnikova Ekaterina
Kyiv National Economic University named after Vadym
Hetman, Ukraine
INDUSTRIAL STRATEGIES OF THE BRICS COUNTRIES
AS FUNDAMENTAL BASIS OF ECONOMIC DEVELOPMENT
Modern conditions of global economic development require from countries
to take into consideration global industrial market trends when using its
industrial potential. Industrial potential of the country is the fundamental
base of economic development. It is very important for the government to
identify strong and weak points of industrial base in order to set strategic
priorities and create an effective industrial policy. Global industrial market
is rather competitive and countries have to pay special attention to
comparative advantage industries. Nevertheless it is not the only task for
building an industrial strategy. It is equally important to investigate the
domestic market opportunities as well as to explore and analyze the previous
experience of building an industrial strategy.
The world leading emerging economies are the economies of the BRICS
group. Despite the fact that there was a decline in economic growth of these
countries observed in 2013, the group is still the bloc of the highest
influence on the global economic arena. Countries of the group are rich in
natural resources and have historical and economic background for successful
economic development. Nevertheless the BRICS countries face many challenges in
field of infrastructure, energy, private sector, science, technology and
innovation. Key conditions for industrial growth of emerging countries are
research and development (R&D), innovation projects and technological
progress. Moreover the BRICS countries should pay special attention to
cooperation within the group. It brings new opportunities for getting mutual
benefits from implementing technological improvements in industry. The highest
results in technological progress are observed in China, followed by India,
number of scientists is growing in Russia and Brazil, South Africa is still
needs more investments for R&D.
It is needed to investigate industrial strategies of every country of
the BRICS group and to find out its importance to economic development.
Brazil economy is the most emerging market of America. It is the second
largest oil producer in America and the ninth in the world. The country has
well diversified agriculture (sugarcane, coffee, frozen fruits produces) as
well as one of the largest cattle herd in the world. Brazil is one of the
leading countries in hydroelectric power. The average share of industry in
Brazilian GDP is about 30% and covers automobile, machinery, textile,
computers, cement, steel, aircrafts and other industries. Nevertheless an
increasing service sector takes lion’s share of Brazil’s GDP [1]. Thus the
economic development of the country is highly influenced by its industrial
strategy.
Now the government of Brazil is implementing an industrial strategy
named Greater Brazil Plan (2011-2014). It is aimed to [2]:
1.
build and strengthen
critical competencies in the national economy;
2.
enhance productivity and
technology density within value chains;
3.
expand the domestic and
external markets of Brazilian companies;
4.
ensure socially
inclusive and environmentally sustainable growth.
The plan has three main courses: investments and innovation, foreign
trade and industry and domestic market.
Russia has strategic priorities in oil and gas industry. About 30% of
GDP belongs to oil and gas industry and it takes about 60% of Russian export
[3]. Russia is the leading country of natural resources reserves and is among
the top ten of oil reserves owners. The country is the largest oil producer in
the world and all the oil companies are privatized that allows to respond the
world market prices quickly. Russia is also the world largest gas exporter what
helps the country to be an influential leader not only in economic sphere, but
also in politics. Besides one of the key industries of Russia is manufacturing
that includes electronics, automobiles, aircrafts and computers. Industrial strategy is very important guide
for economic development of the country.
Russian Federation has been working on the program of industrial
development and rising of industrial competitiveness since 2012. It is a
long-term strategic program that will end in 2020. The main aim of the program
is to create competitive, stable and structurally balanced industry, able to
develop independently in effective way and based on world technological
integration and leading industrial technology elaboration.
This program provides the following key tasks [4]:
1)
creation of new sectors
and markets (new innovation infrastructure and new conditions for entering the
market with innovative product);
2)
development of
consumer-oriented industries;
3)
support of investment demand-oriented industries;
4)
military-industrial
complex development;
5)
technical regulation,
standardization and uniformity of measurements provision.
India is one of the most attractive countries for investments in the
world. In 2013 foreign direct investments to India increased 17 percent and
reached $28 billion, so the country took 16 place in the top 20 attractive
global destinations [5]. Industries of the highest importance in India
are: coal, crude oil, natural gas, petroleum refinery products, fertilizers,
steel, cement and electricity. Positive
dynamics in FDI inflows is supported by effective manufacturing policy.
Previous five year manufacturing plan (2007-2012) was focused on strengthening
manufacturing sector and infrastructure, as well as pharmaceuticals, auto-components
and textiles, technological improvement and labor conditions were highly
emphasized [6].
The next plan that was announced in 2011 - National Manufacturing Plan
and was aimed on raising the contribution of manufacturing sector to GDP from
the present 16% to 25% by 2025 [7].
Main objectives of the strategy [7]:
1)
increase manufacturing
sector growth to 12-14%;
2)
create 100 million
additional job places by 2025;
3)
increase domestic value
addition;
4)
promote green
manufacturing;
5)
develop Small and Medium
Enterprises;
6)
create National
Investment and Manufacturing Zones.
The market of the most dynamic growth and development is China. Chinese
products and services are demanded all over the world. Key factors of future
economic development of the country are: emerging growth of the marketplace
(growing supply of consumer-attractive products) and high-value and high-tech
manufacturing. The industries of future rapid growth are: food and beverage,
healthcare (government funding of $2 billion for biotechnology R&D in five
year), private education (market size is predicted to reach $102 billion by
2025), clean technology, cloud computing and e-commerce (market is projected to
get $650 billion by 2020) [8].
Industrial and technological development of China is provided by national
strategy of development. Key priorities of China’s 12th Year Plan are
sustainable growth, industrial upgrading and the promotion of domestic
consumption. It is aimed to create favorable conditions for development of
alternative energy, energy conservation and environmental protection,
biotechnology, new materials, IT, high-end equipment manufacturing and clean
energy vehicles [9]. In order to achieve these aims Chinese government should
realize the next objectives: optimize structure, improve varieties and quality,
enhance industry supporting capability, eliminate backward production capacity,
develop the advanced equipment manufacturing industry, adjust the optimize raw
material industries, transform and improve the consumer goods industry and
promoting the enlargement and enhancement of manufacturing industries [10].
South Africa is the youngest member of the BRICS group. However it is
the leading emerging market in Africa. The African continent plays an important
role in intra-BRICS relationships. On the one hand, it serves as a source of
raw materials and export market. On the other hand, the BRICS members
contribute a lot to Africa’s development, especially though providing foreign
direct investments in infrastructure and industrial development as well as in agriculture.
Moreover it helps South Africa to advance its national interests and promote
regional integration program.
Key industries of South Africa are mining, metal, iron and steel,
automobile, machinery, textiles, and chemicals. The country is the world leader in mining with significant
reserves of mineral resources and accounts for about 18% of GDP [11]. South
Africa is also the world's largest gold, platinum, manganese, chromium,
vanadium, alumino-sillicates and titanium producer.
Automotive sector contributes about 6% to the GDP and is well-placed for
investment opportunities [11].
Within the National Development Plan of South Africa the Department of
Trade and Industry is working on Industrial Policy Action Plan (2013-2016).
Main objectives of the Plan are [12]:
1.
fight structural
unemployment and create jobs;
2.
build competitive manufacturing with strong growth and
employment multipliers;
3.
trade policy: standards, strategic tariff regions,
clampdown on illegal/substandard imports;
4.
mineral and resources beneficiation, grow
upstream/downstream value chains;
5.
deepen support programs in automotives, metals,
agro-processing, clothing, textiles, leather and footwear;
6.
support green industries, renewables, energy
efficiency, advanced manufacturing and materials;
7.
expand and deepen the industrial financing and
incentives framework;
8.
competition policy: clampdown on collusion, price-fixing;
9.
leverage state infrastructure spend through
localization program and designations.
Summing up the results of the research we should mention that all the
national strategies of the BRICS countries are based on the results of
industrial policies implementation. Thus the industrial development is
reflected in GDP growth that leads to economic development along with rise of
national market competitiveness, increase in exports and foreign direct
investments, creation of new jobs places and improvement of legislative system.
Literature
1.
Brazil industry sectors
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2.
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Kupfer [Electronic resource]. – Access mode:
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3.
Oil & Natural Gas
Sector in Russia: Fueling Growth [Electronic
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4.
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