BRIC Countries Important for Dutch Economy

THE HAGUE- The high growth rates of the BRIC countries (Brazil, Russia, India and China) enhance Dutch trade, concludes the Central Planning Bureau in a report published last month.

In the last three decades, the share of the BRIC countries in global GDP has grown rapidly to 24 percent to date (measured in Purchasing Power Parities). They contributed substantially to global economic growth already before the financial crisis and even more so since 2008.

"Because of their high expected growth rates and large population size, the BRIC countries in general and China in particular will have a major impact on the global economy during the coming decades," says the CPB report. "A small open economy like the Netherlands is particularly likely to be affected by developments in the global economy. We find that the high growth rates of the BRIC countries enhance Dutch trade."

Measured by imports, the BRIC countries have become more important than the US for the Netherlands, although this is not (yet) the case for exports. Nearly 100,000 jobs and 1.7 percent of value added can be associated with Dutch trade with the BRIC countries in 2009. This is a gross effect.

The net effect is much smaller, because people would be employed in other sectors of the economy without trade with the BRIC countries, CPB does note. "Moreover, China's comparative advantage is rapidly changing and moving towards high-tech goods as is evident from the technology and skill content of its export package."

The dynamics of the world economy shift to these countries and this process would be conducive to economic growth if the Netherlands would be more closely connected to the manufacturing production centres in the world. "Although Dutch exports to these countries increase, experience so far has revealed that acquiring sustained access to the BRIC countries is difficult. Differences in culture and regulations limit effective market entry and the opportunities to benefit from these dynamics."

Source: NisNews

BRIC countries are good for the Netherlands


The growing economies of Brazil, Russia, India and China, known as the BRIC countries, offer good opportunities for the Netherlands, according to the government's macro-economic policy unit CPB.

Trading with these four lands has generated some 100,000 jobs and creates almost 2% of the national income, the CPB says in a new background report.

Economic growth in the four countries has been coupled with a sharp rise in Dutch imports but Dutch exports to Brazil, Russia, India and China are lagging behind, the CPB said.

Source: DutchNews