Recent Posts and Categories

The BRICs Will Be Cut to the ICs if Brazil and Russia Don’t Shape Up, Warns Phrasemaker O’Neill

OWoN: The world is shifting in control powers now, and whether all of this will be remains to be seen. However, there is no question the power is shifting to Asia. Permanently.

The BRICS Will Be Cut to the ICs if Brazil and Russia Don’t Shape Up, Warns Phrasemaker O’Neill

Hellenic Shipping News
12 January 2015

Brazil and Russia’s membership of the BRICs may expire by the end of this decade if they fail to revive their flagging economies, according to Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym.

Asked if he would still group Brazil, Russia, India and China together as emerging market powerhouses as he did in 2001, O’Neill said in an e-mail “I might be tempted to call it just ’IC’ or if the next three years are the same as the last for Brazil and Russia I might in 2019!!”

The BRIC grouping will be dragged down by a 1.8 percent contraction in Russia and less than 1 percent expansion in Brazil, according to the median estimate of economists surveyed by Bloomberg News. China is seen growing 7 percent and India 5.5 percent.

The BRICs were still booming as recently as 2007 with Russia expanding 8.5 percent and Brazil in excess of 6 percent that year. The bull market in commodities that helped propel growth in those nations has since ended, while Russia has been battered by sanctions linked to the crisis in Ukraine and Brazil has grappled with an unprecedented corruption scandal involving its state-owned oil company.

“It is tough for the BRIC countries to all repeat their remarkable growth rates” of the first decade of this century, said O’Neill, a Bloomberg View columnist and former chairman of Goldman Sachs Asset Management International. (GSGEPPA) “There was a lot of very powerful and fortuitous forces taking place, some of which have now gone.”

Growth Recovery

The growth slump this year isn’t a new normal though and O’Neill sees expansion in Brazil and Russia partially recovering, helping the BRICs average about 6 percent growth per annum this decade — still more than double the average for the Group of Seven nations.

Their share of global gross domestic product will “rise sharply,” he said.

O’Neill had previously estimated average annual growth of 6.6 percent for the BRICs this decade, a pace it was close to achieving through last year mainly because China exceeded the 7.5 percent annual average growth he estimated for the first three years, he said.

Unlike Brazil and Russia, China is embracing economic change while India, after the election of Narendra Modi as prime minister and benefiting from low oil prices and a young labor pool, may have brighter prospects this decade than last, O’Neill said.

With China and India spurring growth, the BRICs will remain the most dominant and positive force in the world economy “easily,” said O’Neill.

China, India

China growing at 7 percent will add about $1 trillion nominally to global output every year, O’Neill said. When measured by purchasing power parity, China’s growth adds twice as much as the U.S.’s, he said. India expanding at 6 percent will add twice as much as the U.K. in those terms, he said.

“Their consumption is increasingly key for global consumption and which markets were amongst the world’s strongest in 2014? China and India both were up significantly,” he said. “So many investors are herd like, they probably have already forgotten the BRIC’s but it is silly. They are the most important influence in the world.”

A prediction in his book, “The Growth Map,” that the BRICs economies would overtake the U.S. in size this year will be delayed likely until 2017 primarily by the drag from Russia, O’Neill said.

The founding of the BRIC’s Development Bank signals the group’s influence in global economic affairs will rise, O’Neill said.

By 2035, the BRICs will be as big as the Group of Seven nations while China is in “a reasonable position” to be bigger than the U.S. in 2027 and India may overtake France to become the world’s fifth biggest economy by 2017, “certainly before 2020,” he said.

Source: Bloomberg


1 comment :

  1. Such mind control..." If you repeat a lie often enough, people will believe it."

    "That is of course rather painful for those involved. One should not as a rule reveal one's secrets, since one does not know if and when one may need them again. The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous."

    "Aus Churchills Lügenfabrik" ("Churchill's Lie Factory"), 12 January 1941, Die Zeit ohne Beispiel (Munich: Zentralverlag der NSDAP., 1941), pp. 364-369

    This and similar lines in Adolf Hitler's Mein Kampf about what he claimed to be a strategem of Jewish lies using "the principle & which is quite true in itself & that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily," are often misquoted or paraphrased as: "The bigger the lie, the more it will be believed."

    Paul Joseph Goebbels (29 October 1897 – 1 May 1945) was Adolf Hitler's Propaganda Minister in Nazi Germany. He also served as Chancellor for one day, following Hitler's death. He was known for his zealous and energetic oratory and virulent anti-Semitism.


If your comment violates OWON's Terms of Service or has in the past, then it will NOT be published.

Powered by Blogger.