The BRIC Road to Growth. Jim O'Neill

Чтение книги онлайн.

      Chapter 1

      What’s been happening in the BRIC countries?

      It is nearly twelve years since I first coined the acronym BRIC to highlight the remarkable impact these rapidly growing countries were starting to have on the rest of the world, as well as the changes they were experiencing for themselves. The first decade of that period, as I have described elsewhere,1 turned out to be even more dramatic than I had anticipated, but as we move further into the second decade, there is evidence of slower economic growth in each of Brazil, Russia, India and China. Some observers are now suggesting that the tailing off of BRIC growth means that the whole phenomenon was overhyped2 and was never a great investment proposition anyway.3 It is true that the BRIC economies are currently growing by less than in the past decade, but it is not clear whether this is a structural slowdown or just a cyclical one. For reasons I outline below, it was highly unlikely that they would have continued to see GDP growth at the same rapid pace.

      Moreover, while it is interesting to look at their collective economic performance, it is also clear that there are big differences between the four economies. China is of particular importance, as the next chapter will discuss in more detail.

      Table 1.1 shows GDP growth for each of the BRIC countries by decade, going back to the 1980s, along with my 2010 forecast for the ten years to 2020, and actual growth rates in 2011 and 2012. The figures tell the story of a decade of unusually strong growth, followed by a return to a less astounding, but hardly disappointing, growth performance. It is clear that the decade 2001–10 was a particularly good one for the BRIC economies. In some ways, it may have been unusually fortunate, maybe even a ‘perfect storm’ for rapid growth. In particular, nothing went badly wrong in any of the four countries, which was spectacularly lucky given their diversity in terms of their economies, societies and vulnerabilities to external influences. This is one of the main reasons (as I explained in The Growth Map1) that real GDP growth during that decade far exceeded expectations.

Table 1.1. BRIC real GDP growth by decade.

      Source: IMF and Goldman Sachs Asset Management (GSAM).

      Perhaps to the casual observer a further acceleration in growth after the 2000s might have seemed inevitable. To those of us with experience in these economies, and in studying long-term growth trajectories in general, it seemed highly likely that the growth of the BRIC economies would slow down. The Goldman Sachs (GS) forecast for this decade was 6.6% on average, which would seem to be a more sensible benchmark than the extremely rapid growth of the previous decade. Anything lower would count as disappointing. If growth now starts to slow either to less than this figure, or even to less than the previous thirty years together, the adjective ‘overhyped’ would be justifiable. (As it turns out, average BRIC real GDP growth for the three decades 1981–2010 was also exactly 6.6%.)

      As can be seen, primarily because of China’s importance, BRIC growth in 2011–12 has been 6.7%. Although slightly higher than the past thirty-year average, it is, of course, well down from 2001–10. At the time of writing, consensus forecasts for 2013 and 2014 are 6.6% and 6.9%, respectively. So while the BRICs’ real GDP growth this decade might be disappointing compared with the surge of 2001–10, it has actually slightly surpassed my initial expectations.

      The detail obscures an extremely important point. Even with slower GDP growth in the next ten years compared with the previous decade, the impact of the BRIC economies on the world is still increasing. Figure 1.1 makes this point, which is vastly underappreciated by so many people, powerfully.