HH Is The BRIC Future On Track - Summit At Critical Crossroads

Even amid trade wars and eroding global growth prospects, the large emerging BRIC economies remain positioned to surpass the largest advanced economies in about 15 years.

The 10th BRICS Summit will take place in Johannesburg, South Asia. Led by Brazil, Russia, India, China and South Africa, the international conference highlights the rising power of large emerging economies in the world economy.

When the first BRICS Summit took place in Yekaterinburg, Russia, after the global crisis, the combined economic power of the major BRIC countries amounted to some $10 trillion, or about a third of the largest economies of the West, as reflected by the US, the core European countries (Germany, UK, France, Italy), and Japan – the so-called G6 economies.

Today, the BRICs are coping with a fragile global recovery that is overshadowed by America’s new protectionism.

China and India on track, Russia and Brazil penalized by politics

In 2000, China’s economy was barely a tenth of the US GDP. Brazil was stabilizing after years of turmoil. Russian economy had been crushed by the US-led “shock therapy.” And reforms were intensifying in India.

A decade later, the world economy looked very different. The US economy was still more than twice as big as that of China but Japan’s growth had been penalized by stagnation. Chancellor Merkel’s Germany and President Sarkozy’s France led the ailing Europe. In Brazil, the Lula era brought about a dramatic catch-up, while reducing historical income polarization. In Manmohan Singh’s India, growth was accelerating. In Russia, President Putin had multiplied the size of the economy by almost six-fold.

Is the world economy’s structural transformation on track? The short answer is an emphatic yes, but there are significant differences among the BRIC economies.

 Let’s use the largest economy, the United States, as a benchmark to compare the original BRIC assumptions (dashed line) in the early 2000s with the real economic development in the past two decades and the expected decade (Figure 1).

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Disclaimer: Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute ...

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