Economists seem to be inordinately fond of acronyms. As the efforts of European leaders to rescue their 'PIIGS' continue this week, elsewhere eyes have increasingly turned to the BRICs - Brazil, Russia, India and China - as new movers and shakers of the global economy.
It was Jim O'Neill, a leading economist at Goldman Sachs, who first coined the phrase ‘BRIC' in 2001. 'My basic tenet,' he has since said, 'was that if these countries embrace productivity changes that go with global trade and globalisation… they're likely to become big'. And he was right.
Accounting for one quarter of the Earth's land mass and 40% of its population, the BRICs' combined GDP represents 15% of the global economy: a figure that has doubled in 10 years, and is set to surpass the G7's share before 2040. Given also that they collectively hold over 40% of global currency reserves, the BRICs are simply too big to ignore.
On one hand, the group is notable for its heterogeneity; Brazil and India are democratic, Russia perhaps nominally, while China is a one-party state. Yet on the other hand, several factors draw them together. While their economic policies may differ, all are growth-oriented: aimed at poverty mitigation and diversification. Significantly, all have opened up their markets and weathered the recession (though Russia less strongly) without buying into full liberalisation - a fact that has led some commentators to herald the beginning of a new, post-Washington consensus.
Though their ties are ostensibly economic, moreover, the BRICs have undoubtedly begun to behave as a political entity over previous months. Following their first formal meeting in Russia in June 2009, the group of four - alongside South Africa and Mexico - jointly set out their case for the reform of the Bretton Woods institutions to better represent the developing world, ahead of the summit of G20 nations (of which they form part) last September. Meeting again in Brasilia last week, the BRICs called additionally for reform of the UN, in particular, to afford India and Brazil a seat on its prestigious Security Council.
Ten years since he foresaw the rise of the BRICs, with economists now positing that the rise of a new N-11 will transform the global economy yet further, Jim O'Neill's call for a 'more optimal state of world governance' needs acting upon.
It was Jim O'Neill, a leading economist at Goldman Sachs, who first coined the phrase ‘BRIC' in 2001. 'My basic tenet,' he has since said, 'was that if these countries embrace productivity changes that go with global trade and globalisation… they're likely to become big'. And he was right.
Accounting for one quarter of the Earth's land mass and 40% of its population, the BRICs' combined GDP represents 15% of the global economy: a figure that has doubled in 10 years, and is set to surpass the G7's share before 2040. Given also that they collectively hold over 40% of global currency reserves, the BRICs are simply too big to ignore.
On one hand, the group is notable for its heterogeneity; Brazil and India are democratic, Russia perhaps nominally, while China is a one-party state. Yet on the other hand, several factors draw them together. While their economic policies may differ, all are growth-oriented: aimed at poverty mitigation and diversification. Significantly, all have opened up their markets and weathered the recession (though Russia less strongly) without buying into full liberalisation - a fact that has led some commentators to herald the beginning of a new, post-Washington consensus.
Though their ties are ostensibly economic, moreover, the BRICs have undoubtedly begun to behave as a political entity over previous months. Following their first formal meeting in Russia in June 2009, the group of four - alongside South Africa and Mexico - jointly set out their case for the reform of the Bretton Woods institutions to better represent the developing world, ahead of the summit of G20 nations (of which they form part) last September. Meeting again in Brasilia last week, the BRICs called additionally for reform of the UN, in particular, to afford India and Brazil a seat on its prestigious Security Council.
Ten years since he foresaw the rise of the BRICs, with economists now positing that the rise of a new N-11 will transform the global economy yet further, Jim O'Neill's call for a 'more optimal state of world governance' needs acting upon.
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