BRICS Rise Much Faster than Predicted

A huge topic in academia at the moment is the changing global economic and political landscape. The “Reshaping Power, Shifting Boundaries” theme of the 2012 International Political Science Association conference being held in Madrid in July is a testament of this. Academics from around the world will gather to discuss how power is being reconfigured and how it is creating opportunities for change.

One of the political and economic power players emerging on the world stage are the BRICS countries or Brazil, Russia, India, China and South Africa. In line with that thought, Jim O’Neill the Chairman of Goldman Sachs Asset Management who coined the term BRIC is set to release his new book next week entitled The Growth Map: Economic Opportunity in the BRICs and Beyond.

Of the excerpts that have already been released, O’Neill highlights some startling statistics. Between 2001 and 2010, the BRIC economies’ GDP rose much more sharply than thought possible even in the most optimistic scenario. “Moreover, their citizens’ wealth showed equally remarkable increases, bringing hundreds of millions of people out of poverty. Their GDP per capita, the best indication of individual wealth, collectively trebled.”

One of the biggest surprises, according to O’Neill, was Brazil. The South American powerhouse has overtaken Italy to become the seventh largest economy in the world, with a GDP of $2.1 trillion (£1.3 trillion). “I never imagined Brazil could grow so big so fast. “Our [analysis] did not suggest that it would reach that stage until after 2020.”

Although O’Neill discusses the BRICS rapid export growth, the commodity boom and unsustainable American demand, he also highlights the significance of the BRICS consumer. For example, personal Chinese consumption rose by $1.5 trillion between 2001 and 2011, the equivalent of creating another UK.

China’s growth continues to amaze with O’Neill’s research suggesting “China’s economic output – its gross domestic product – could match that of the US as early as 2027, and perhaps even sooner,” he writes. “Since 2001, China’s GDP has risen fourfold, from $1.5 trillion to $6 trillion [£949bn to £3.7trillion] Economically speaking, China has created three new Chinas in the past decade.”

As O’Neill’s economic statistics rightfully point out, BRICS, who represent around one-fifth of the world’s economy, have emerged as a powerful new voice in the world, especially in the economic realm. And the leaders of BRICS countries realize this.

Government officials from the ‘big five’ have stated that they should have a bigger say in institutions such as the IMF.

Brazil’s foreign Minister Antonio Patriota recently told Reuters that the financial crisis battering Europe showed that the emerging world’s time was now.

“I think we are experiencing truly tectonic changes when it comes to the configuration of power internationally. These changes were accelerated by the 2008 economic crisis, and now a second wave with the European crisis and its impact on the world economy,” he said.

O’Neill’s full analysis of BRICS will be released next week. It will undoubtedly be a text that will help the public better understand the current global economic changes.