The economic performance of the five leading emerging economies of the BRICS group exceeds expectations of the man who first came up with the acronym, the inventor of the term told Xinhua in a recent interview.
Former Goldman Sachs chief economist Jim O’Neill coined the acronym BRIC in 2001 to cover the nations Brazil, Russia, India and China (South Africa later joined to make the term BRICS) as economies which would blossom in the 21st century and take the lead in global business.
“Sixteen years later the BRICS share of global GDP (gross domestic product) is bigger than every scenario I projected,” O’Neill said.
His comments came weeks ahead of the ninth BRICS summit which is to be held in the Chinese city of Xiamen early next month.
O’Neill predicted in his 2001 paper “Building Better Global Economic BRICS” that the BRICS nations by now would have a combined economic worth of about 11.6 trillion US dollars. Their actual worth is about 16.6 trillion dollars this year.
The first decade of this century was a period in which the group reached and then more than fulfilled the potential that O’Neill foresaw in 2001, and which has made the world sit up and take notice.
Average annual growth rates for the BRICS nations from 2001-2011 were, according to the International Monetary Fund (IMF) – Brazil 3.8 percent, Russia 4.8 percent, India 7.8 percent, China about 10.7 percent and South Africa 3.7 percent.
The second decade has seen less stellar progress for the nations, as the world economy recovers from the financial crisis and nations like China are embarking on a different phase of development.
The nations have collaborated and now meet regularly as a group. They have set up a development bank called the New Development Bank, based in Shanghai.
O’Neill also noted a very recent development in bilateral trade between China and Germany, one of Europe’s leading economies.
In 2016, China became Germany’s largest trade partner, with trade between the two nations surpassing 150 billion dollars.
“It’s good. A lot of these forces are happening. Here’s an important statistic about global trade – China became Germany’s largest trading partner. Hugely symbolic for BRICS countries,” said O’Neill, who believed the BRICS success story is for the long term.
O’Neill hits back at those who have said that the BRICS is losing its shine.
To focus merely on a slowdown in the combined growth of the economies is missing the point, said O’Neill.
China’s economy continued its steady expansion in the first half of this year with its GDP up 6.9 percent year-on-year to about 38.2 trillion yuan (5.6 trillion dollars), according to the country’s National Bureau of Statistics.
Russia and Brazil suffered recessions in recent years, but Brazil’s economy grew again in the first quarter of this year after a protracted recession and Russia achieved a growth rate of 2.5 percent year-on-year in the second quarter.
“The fact they have slowed down is an irrelevance if they are still way bigger than I thought 16 years ago – primarily because of China but also because of India, and not withstanding the problems that Brazil and Russia have had.”
“So these people that say it is not so important because they have grown less, it is ridiculous,” he said.
What’s more, O’Neill has his eyes set on other nations that could also surprise the world in the coming decades.
“I would say going to 50 years in the future, there are probably four countries with potential to be as big as Russia or Brazil,” said O’Neill.
“Definitely Indonesia, possibly Mexico, possibly Turkey and, excitingly, possibly Nigeria. But let us see – just because they have the potential it does not mean it will happen.”
“The BRICS countries have already said they are open to other members. But I would not do that any time soon until we see clear evidence of any of those four becoming a lot bigger,” he said.
They are an unequal group in economic volumes, with China leading the way and South Africa being the smallest economically.
O’Neill had always had misgivings about South Africa being in the group, but thinks it should be there, despite its economy being the smallest at about 300 billion dollars a year.
“China creates another South Africa (economically) every six months, how on earth can South Africa be economically in the same class?” the economist said.
– China Daily/Repubhub