Brics at 10

Jim O’Neill, the Goldman Sachs economist who invented the Bric acronym, may be distancing himself from his creation, preferring the label ‘growth markets’. But his employer is still busy pushing what some are now calling a Bloody Ridiculous Investment Concept. Here’s what Goldman forecasts for the Brics in 2050. Read more

By Márcio Garcia of PUC university, Rio de Janeiro

A decade ago, when Jim O’Neill coined the Bric acronym, he was harshly criticized for including Brazil. 2001 had been a bad year for the economy, with contagion from the Argentine crisis, our own energy crisis and political disarray in the governing coalition. When the central bank governor wrote to the finance minister to explain the breach of the upper limit of the inflation target band, he said inflation should trend down as shocks of the kind that hit Brazil that year were not to be expected in the future. Little did we know what was coming. Read more

By Sergei Karaganov

Many traits in Russian contemporary development cause me grave concern. Systemic corruption, for example; weak institutions; the manipulation of politics by an authoritarian leadership; and the economy’s excessive dependence on energy exports.

But as a seasoned observer, who witnessed Russia surviving several crises, I am tired of panicking. I believe that Russia has a future as long as there is at least some political and economic modernization. And this future depends on international cooperation, not least with the other Brics. Read more

Let’s not throw the baby out with the bath water. Critics of the Bric concept have marked its 10th anniversary with suggestions that its time has passed or even that it should never have been invented.

This goes too far. While Brazil, Russia, India and China are as much divided as united they do have common interests – and these interests are political as well as economic. Read more

Who’s talking about the Brics? Well, we are, of course. It’s 10 years since the acronym was coined by Jim O’Neill, and it has become common parlance in financial markets and beyond. But how fast did it catch on? And has it peaked?

Chart (2) of the week looks at how many times “Bric” has been used in published sources over the last decade. Read more

By Ben Simpfendorfer of Silk Road Associates

The “Brics” expression has captured investor’s attention over the past decade. But it can also mislead. China’s relative size to the other Brics is one example. Its $5.9tn economy is larger than the combined economies of Brazil, Russia, and India at $5.3tn.

So is China still a Bric? Or is it ‘the single brick’ that is propping up the rest of the global economy, including demand in Brazil and Russia? Read more

James Mackintosh, investment editor, looks at the Brics’ underperformance in equity markets this year. Can monetary easing plug the gaps?

The inexorable climb of a latent global superpower: last year, Brazil’s economy outstripped Italy’s for the first time; this year, it will be bigger than the UK’s. So crowed local Brazilian newspapers recently. But how much of this triumph is real, and how much is an optical illusion? Judging by finance minister Guido Mantega’s latest measures to boost the economy, not as real as it might have seemed. Read more

By Kingsmill Bond

Ten years ago the mood among emerging market investors was one of despair. After a series of crises, EM equities had gone nowhere for a decade.  All they seemed to offer was risk without reward.

The rebranding of the asset class as Brics was welcome and timed the bottom of the market perfectly. However, the cyclical upsurge in commodities has been so powerful that it has revealed a split in both emerging and developed markets: commodity producers – EM and DM – have outperformed in equities to such a degree that it is time to reorganise our labels. Out with the Brics and in with the Carbs. Read more

By S.D. Shibulal, CEO of Infosys

A lot has changed since the Bric acronym was coined. Ten years and two economic recessions later, the centre of gravity of global economic activity has shifted, new markets have emerged and the global economy is more integrated than ever before. Advances in technology are redefining the way we connect and interact with our consumers. Sustainable consumption has gained centre-stage. The world as we know it today is quite different from what it was a decade ago.

But formidable challenges remain, notably in closing the gap between rich and poor by promoting inclusive economic growth. Read more

“It’s time to bid farewell to the Brics,” wrote my FT colleague Philip Stephens this week. Jim O’Neill, the Goldman Sachs economist who first coined the acronym which groups Brazil, Russia, India and China, seems to feel the same. His new book, also reviewed this week by Stefan Wagstyl, the FT’s emerging editor, is called ‘The Growth Map: Economic Opportunity in the BRICs and beyond‘.

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So, was he right? Ten years ago Jim O’Neill of Goldman Sachs looked at four growth economies – Brazil, China, India and Russia – put their first letters into an acronym, and the Brics (as a concept) were born.

So how have they fared? What if you invested in the Brics ten years ago – where would you be now? Chart of the week finds out. Read more

Russia is often singled out as the Bric country that doesn’t belong in the Brics.  Critics say that with its ageing population, dependence on oil and gas and widespread corruption, it’s not in the same league as its dynamic rivals – Brazil, India and China.

Jim O’Neill, the Brics’ inventor, disagrees. In The Growth Map, a book marking the 10th anniversary of his coining of the acronym, he rejects suggestions that Russia should be dropped from the team. He argues, in his characteristically forthright way, that in terms of GDP her head, Russia has the potential to beat not just the other Brics but “all other European countries” – and join the European Union. Read more

It’s time to bid farewell to the Brics. Rolling China, India, Brazil and Russia into a clever acronym once offered an easy account of the redistribution of global power. But slotting rising states into neat categories betrays a western-centric world view that now obscures more than it illuminates.

For one thing, they are not all the same. United by impressive economic growth rates, the Brics are divided by politics: two authoritarian regimes sit alongside two democracies. Even then, Beijing and Moscow look uncomfortable bedfellows. Points of stress (think of Russia’s emptying and resource-rich east) are easier to identify than coincidences of strategic interest. Read more