BRIC success shows the power of a good idea
By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
For centuries Christendom was an idea that shaped reality. The kings, nobles and most of the people of predominantly Christian lands believed they were bound together by their common religion. Wars were considered family fights. The European Union is a distant heir of that common identity. In the last decade the concept of the BRIC bloc of developing nations has played a similar role in global geopolitics.
The acronym was first used in print by Goldman Sachs’s Jim O’Neill a decade ago this week. The economist wanted a catchy way to identify a great theme – the rise of the world’s largest emerging markets. He identified Brazil, Russia, India and China as the most significant representatives of this trend.
O’Neill was quite right about the economics. Since 2001, GDP per capita has increased at annual rates ranging from 2.6 percent for Brazil to 10 percent for China (using International Monetary Fund estimates for 2011). That performance easily beats the 1 percent rate managed by the United States and major European economies. True, Argentina and Indonesia both grew faster than Brazil. And Russia got a lucky break from rising oil prices, but AIC isn’t the sort of acronym that changes the world.
BRIC has done just that. Investors now use it as shorthand for emerging markets of all sorts. Membership in the club added to the international status of Presidents Lula da Silva of Brazil and Vladimir Putin of Russia. It almost certainly prodded Indian leaders to think more globally, and influenced the choice of Brazil for the 2016 Olympics. The four governments have had their own summits, with South Africa joining to make the group even more euphonious – BRICS.
So far, the BRICs have been almost as solid as, well, a brick. (O’Neill intended the pun from the beginning.) The next decade is likely to be more difficult. All the countries suffer from corruption, starting with India; China has a financial bubble; Russia would crumble and Brazil would struggle if commodity prices fell from their current exalted levels. But a stumble or two will not change the longer-term global power shift, from ex-Christendom to the world symbolised by BRIC.