The global economy is shifting in favor of the big emerging countries.

According to Troyjo, “Even in this difficult year of 2022, the GDP of E7, measured by purchasing power parity (PPP), will be $60 trillion, while the GDP of the Group of Seven (which includes the United States) will be Japan, UK, Germany, Canada, France and Italy), on a purchasing power basis, would be $49 trillion.”

The economic growth of emerging countries is a new trend on the world stage. In this context, the total gross domestic product (GDP) of the so-called E7, a grouping of the world’s seven largest emerging economies – China, India, Brazil, Indonesia, Russia, Mexico and Turkey, already vastly exceeds the total GDP of the G7 economies.

There is a shift of “plate tectonics” in the global economy in favor of large emerging countries. It is the most dynamic and important event happening in the world today that brings extraordinary opportunities to Brazil, said Marcos Trujjo, President of the New Development Bank for the BRICS (Brazil, Russia, India, China and South Africa). Economic Council meeting of the National Agricultural Association (SNA). The meeting was coordinated by Foundation President Antonio Alvarenga.

According to Troyjo, “Even in this difficult year of 2022, the GDP of E7, measured by purchasing power parity (PPP), will be $60 trillion, while the GDP of the Group of Seven (which includes the United States) will be Japan, UK, Germany, Canada, France and Italy), on a purchasing power basis, would be $49 trillion.”

window of opportunity
Trujillo stated that in the coming decades, Brazil will have a window of opportunity, during which it will be able to accumulate huge surpluses through its exports in sectors in which the country has comparative advantages. “But there is still a challenge to export with greater added value,” the executive added.

“Reconfiguring global value chains may be in the country’s interest, depending on the flow of its international trade relations,” Trujillo noted, noting that in 2021 Brazil set historic records in exports and trade surplus.

immigration
Another aspect highlighted by the head of the BRICS Bank is the noticeable change in some economies, which have stopped focusing on activities based on the low cost of labor wages, to become technology-intensive economies, as is the case in China.

Thus, the executive said, many companies have left the country to continue operating in the labor-intensive sectors of Vietnam, Myanmar or Bangladesh, for example.

the demand
The demand reconfiguration movement was also another factor of change indicated by the executive in the global economic context. Trujillo noted that the flow of trade between Brazil and China in 2001 “was US$1 billion annually and today it is US$1 billion every 60 hours”.

“In the next 10 years, China will import 25 trillion US dollars, which is 2.5 trillion US dollars annually. If Brazil maintains the same percentage that it occupies in the total foreign purchases of China, which is 4%, it will sell 100 billion US dollars annually. In 2021, sales to China have already reached 80 billion US dollars, ”explained the CEO.

Today, Brazil exports more to China than it exports to the European Union, the United States and South America combined. It exports more to Bangladesh than to Denmark, Australia and Israel combined. “It exports more to Malaysia than Italy, and Thailand more than to France,” said Troyjo, adding that the country has a high tendency to receive foreign direct investment, as is the case in the United Arab Emirates and Saudi Arabia.

India
Troyjo also noted that in the past five years, India’s economy has grown more than China’s. “Brazil’s bilateral trade with China is currently about 140 billion US dollars annually and with India it is 9 billion US dollars, meaning we have a huge room to increase with this country.”

infrastructure and food
The executive noted that the growth of economies also increases per capita income, which leads people to double their food and calorie intake.

“This context also supports the expansion of investments in infrastructure,” Trujjo said, noting that the sector has undergone changes with technological advances. “The world will need food and infrastructure.”

The head of the BRICS Bank also highlighted that technology is different from dividing the primary, secondary and tertiary sectors. “Today we have a lot more technology embedded in soy than the manufacturing part.”

Finance
As Trujjo stated during the meeting in the System of National Accounts, the New Development Bank is the symbol of emerging economies.

“In this multilateral bank, Brazil has its largest asset,” he said, declaring that the institution had recently agreed to a R$1 billion agreement with Banco do Brasil in the field of infrastructure for financing irrigation systems in rural properties. .

In addition, Trujillo reported that of the R$170 billion of resources the bank makes available for financing focused on private sector infrastructure over the next five years, at least R$20 billion will be invested in Brazil (in this period, 4 billions of Brazilian Reals annually). “The private sector has become a great aggregator of value,” the CEO emphasized.

During the meeting, the participants in the SNA also made some suggestions to the head of the BRICS Bank to invest in the country’s infrastructure in the areas of security, energy and the use of water resources.

Attendees
The meeting of the Economic Council was attended by Antonio Carlos Pinheiro, President of the Foundation for the Study of Foreign Trade (Fonsex). José Antonio do Nascimento Brito, President of the Trade Association of Rio de Janeiro (ACRJ); Daniel Homem de Carvalho, Legal Vice President of ACRJ; Roberto Motta, engineer and writer. Helio Ceremarco and Tito Reeve, Vice President of the System of National Accounts; Francisco Villella, Leonardo Alvarenga, Sergio Malta and Thomas Tosta de Sa, Foundation Directors; Rui Ottavio Andrade, Member of the Financial Council of the System of National Accounts, and economists Carlos Zado de Freitas (National Trade Federation), Helio Portocarrero, Marcio Fortes de Almeida, Ne Brito and Paulo Tarso de Medeiros.