The main feature of the new issue of The Economist is on the emerging economies. Brazil, Russia, India, China and South Africa make up the group better known as the BRICS. In the wake of the 2008 global financial crisis the economies of the BRICS managed to roar onward and upward. Analysts thought this was a crucial moment for the countries and a sign that the Western standard bearers had some company that would change the global economic landscape.
Five years later the BRICS are not looking so great. All are growing, but things are leveling off for most. Economics correspondent Ryan Avent says (see video) that the booming growth may have been a unique set of circumstances as opposed to a new trend. He says that China took advantage of existing global trade to achieve massive growth. That was held back by high poverty levels and poor policies. Changes helped propel China forward in a way that benefited many other countries around the world.
Now that China has caught up so much to the world’s leading economies there is less room to continue growth at a rapid pace. That has impacts on fellow BRICS and other emerging economies. Most of all, what China did is not necessarily something that other nations can replicate. So that leaves us with wondering what will come next.
When the global economy took a massive hit in late 2008 it was the emerging markets, countries like India, China and Brazil, that picked up the slack for the older Western powers. These countries managed to maintain strong growth and attack plenty of attention from investment and development experts.
Nearly five years later the same countries are showing continued growth while the United States, UK, France and more trudge along. One would suspect that investors would look to the strong growth of emerging markets for financial gains.
Turns out the opposite is happening. As the US begins to get back in order money is rushing out of emerging markets, reports the Wall Street Journal.
“It feels like the party is ending,” said Howard Wong, managing director at Doric Capital Corp. in Hong Kong.
Facing the loss of foreign capital, central banks in these emerging markets have attempted to prop up their home currencies. Continue reading
A meeting of the major middle-income countries in South Africa garnered plenty of attention, but produced little in terms of actual policies.
Brazil, Russia, India, China and South Africa (BRICS) account for over 40% of the world’s population, 1/4 of the world’s GDP and are responsible for 55% of the global economic growth since 2009. The BRICS have raced onward in the face of the financial downturn and are poised to take a larger share of the global economy in the coming years.
What will this mean for development, for the global push to reduce poverty, inequity and the so-called north-south imbalance of power. Some experts think not much, because the BRICS are more a concept than a cohesive force. Continue reading
The group of nations known (by wonks anyway) as BRICS — Brazil, Russia, India, China and South Africa — are fast moving away from being recipients of foreign assistance and toward taking a more active role as donors, drivers of aid and development.
It’s worth paying attention to this shift, what’s driving it and the broader implications beginning with the prediction that the U.S. will soon be second to China as a world economic power. These ‘development’ issues may soon be viewed less as charitable America sending help overseas and more about assuring that a globalized world doesn’t simply increase inequities everywhere.
Flickr, Blog do Planalto
BRICS 2011 meeting in China
At this group’s recent summit meeting in New Delhi, these countries which now represent half the world’s population said they want more of a say in how the world fights poverty, reduces inequities and who gets to make the decisions. As the Mail & Guardian online reported, the BRICS are reshaping a reluctant world order partly out of anger at the West’s historic dominance:
The BRICS grouping’s political clout has grown with its importance to the world economy and the latest summit declared its intention to set up (its own) development bank.