By Sonia Mathur
The combined might of the BRIC economies in the financial world is formidable – but what is it like to trade with these markets?
Brazil, Russia, India and China hold 40 percent of the world’s population, 25 percent of the world’s land mass and 25 percent of the world’s GDP.
While economically it seems fair to club these emerging markets together, they are in fact varied and diverse in composition and have their own set of advantages and challenges.
China, India and Brazil are developing countries while Russia would count itself as a developed country. The first three were European colonies while Russia has never been a colony, at least in the modern sense, though it could be argued that it was colonised by the Mongols for many years!
Russia is the largest in terms of land size while China leads in the number of people. China and Russia have had communist regimes, while India and Brazil have dabbled with socialism.
Welsh and other UK businesses are seeing the potential within these countries. One Welsh business, which is literally building bridges with India, is Cintec engineering. Based in Newport, MD Peter James has taken his company to all corners of the earth.
A Newport lad, Peter worked across Europe and America before getting the contract with the Indian Railways to strengthen the thousands of bridges it has responsibility for.
In this, he was taking a step back in time. A number of Welsh people worked in laying the tracks across the vast Indian subcontinent when the railway system was initially built during the Raj. After independence the central government took control of the running of the trains and that is how things stood until now.
There are more than one hundred thousand railway bridges across India. “Some of these bridges really reminded me of home,” Peter told Wales World Wide. “Of course they’re built by British engineers so there are bound to be similarities.”
He found working in India and interesting but challenging experience. “Culturally it’s a different place. The red tape there, I can only describe as an onion. You peel a layer of it off and there is another layer staring back at you. Engineering projects are long-term, large-scale projects.
“On average we found where things take three or four years in other places, in India decisions could take up to six or seven years.
“It seems the Brits left a lot of their bureaucracy behind and the Indians have grown it somehow!”
But the British can’t be blamed for the level of bureaucracy in Brazil.
Cardiff-based Cansford Laboratories have recently opened an office in Sao Paolo. The business has pioneered techniques for quicker, more effective testing of hair samples for evidence of drug and alcohol misuse. It opened its sister laboratory, Chromatox Limitada, in Brazil last year.
Managing Director John Wicks told Wales World Wide he would have found working in Sao Paolo very difficult without a partner with Brazillian roots. “It’s very bureaucratic. One of the features is the use of a notary: you have to validate everything. There are layers of old fashioned bureaucracy.”
John says being able to speak the local language is very important in Brazil. “You need someone who understands local customs and ways of working and is able to speak the language.”
But despite frustrations there are some positives for both Peter and John in working with the BRIC countries. For example, they were both impressed by the skillset of their local employees.
Both agreed though, that while the people were proactive, their governments slowed things down.
Both these businesses needed high levels of investment and the stakes were quite high.
John says the Brasillian government prefers companies’ offices to be in their country. And similarly, the Indian government is reluctant to let money out of the country.
“We’re often paid partly in rupees,” says Peter. “Which is fine because we can use that to pay our staff in India.”
“It takes three times as long to set up, but the market is so large that the returns are three-fold as well,” says John about Brazil.
Away from the railways, Peter James and Cintec will also be using their building expertise to restore the Konark temple in the Indian state of Orissa. The temple was built in the 1200s and has suffered erosion over the years.
Maintaining old buildings is nothing new for Cintec, who also helped to restore one of the pyramids in Egypt. They used their patented technology not only to bring the pyramid back to life but also to make it future proof.
“The Konark Temple is a beautiful old building which is sacred for the locals,” said Peter.
“It’s built of sandstone and we are keen to start work on it to restore it carefully and make it last a long way into the future.”
Both Peter and John agree on one thing: while working with India and Brazil can be perplexing it can also be rewarding. Their mantra is “patience.”
By 2030, it’s estimated that more than 80 per cent of the world’s middle class will live in the BRIC countries and account for 70 per cent of total consumption expenditure. So investing in countries like India and Brazil seems like the way forward.