Opinion: New players in the world economy
2015-08-15 12:30:00 -

Asdrubal Santana


Not a long time ago, emerging markets used to be summed up with the acronym ‘Bric’. Brazil, Russia, India and China were the fastest-growing economies in the world, showing excellent macroeconomic results during the first part of the 21st century.


With the subsequent inclusion of South Africa to this group, called now Brics, together they represented about 20 per cent of global domestic product in 2013, according to the International Monetary Fund (IMF).


However, since last year these markets have been slowing down due to a wide range of issues. The Russian contraction, for example, is the result of oil prices falling and the imposition of several sanctions by the west after invading Ukraine. Analysts predict that the Kremlin economy will shrink by 3.8 per cent by the end of 2015.


The disappointing performance of Brazil is more related to bad practices. A huge corruption scandal in the state-funded oil company Petrobras has had a negative impact on its reputation, on investors’ confidence and the popularity of President Dilma Rouseeff. As a consequence, the Brazilian economy is expected to contract by a percentage point.


In the Chinese case, growth is predicted to slow to 6.8 per cent in 2015 and 6.3 per cent in 2016 as “previous excesses in real estate, credit and investment continue to unwind,” the IMF has said. 


As for South Africa’s growth, it has been reduced to 2.1 per cent from a previous 2.3-per-cent projection, as a result of fluctuating commodity prices, strikes and widespread unemployment.


India is the only market that offers an optimistic forecast within the Brics group. “With an expected growth of 7.5 per cent this year, India is, for the first time, leading the World Bank’s growth chart of major economies,” said World Bank chief economist Kaushik Basu after the release of the latest Global Economic Prospects (GEP) report 2015. 


This prediction comes after the Indian government introduced some economic reforms to encourage foreign investment and make the country more competitive. 


But excluding India, is it all over for the Brics?


For British economist Jim O’Neill, who came up with the original acronym back in 2001, the name “is certainly here to stay”. He says that after their announcement last year of setting up a joint bank with $50bn in capital, “their influence is likely to rise as a group, in terms of global governance.”


Beyond these debates, it looks clear that the world is becoming more engaged in the performance of new emerging markets which are showing better and stronger growth and interesting conditions for investment. 


O’Neill himself, in his book The Growth Map, identified what he called the “Next 11” – an “embarrassing” acronym to put together a bunch of countries which are rising up after the Brics. 


Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam seem to be the new trendy upcoming markets. Although very diverse in their living standards and size of economies, they all have in common a growing population and an extensive industrial capacity and potential.


What is also intriguing is to imagine how these countries can co-operate and be as influential as the Brics are. With different cultures, industrial emphasises and even incohesive foreign policies among them, for the Next 11 to work as a homogeneous group sounds like a challenge. 


As the Economist Business Unit said in their paper published in 2013 about the post-Brics era: “What comes next isn’t clear, but the world does appear to be entering a new phase of global growth.” This growth will depend only on the decisions made by these countries which will allow them to become the next economic leaders, or just another disappointing promise.



Asdrubal Santana is a communications specialist whose previous clients include DuPont and Unesco, and a volunteer for NGOs dedicated to promoting human rights and democracy in his native Venezuela. He is currently based in Dublin.

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