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As artificial constructs go, the phantom colossus of emerging economic superpowers known as BRICS has had an overhyped 11-year run and needs to be retired.
The acronym was coined by a global economist at Goldman Sachs Group Inc., the New York investment bank, in 2001. At that time, Brazil, Russia, India and China – the first countries to which Wall Street applied this new marketing term (South Africa, the “S” in BRICS, was added last year) – were, or at least appeared to be, characterized by rapid GDP growth that outpaced the developed world, and the adoption of Western-friendly free-trade practices, deregulation policies, and streamlined bureaucracies.
If not one of the bigger hoaxes of the new century, the BRICS certainly aren’t the threat to the old world order they’ve long been touted as.
The torrid GDP growth rate that prevailed in the BRICS countries through the 2000s has markedly slowed in each of them. And the Western-friendly reforms have stalled or were stillborn.
Russia has relapsed into pre-perestroika cronyism, and its population is in decline. China’s working-age population will peak, at 1 billion, just two years from now. China will then begin struggling with the same imbalance of workers to retirees that tends to be regarded as a uniquely Western problem. By contrast, a U.S. population already more than twice the size of Russia’s, is forecast to grow an astounding 40 per cent by mid-century.
Brazil, its economic growth rate having collapsed last year to 2.7 per cent from 7.5 per cent in 2010, has resorted to blatant protectionism under pressure from local manufacturers. Brasilia has recently imposed steep tariffs on everything from imported Mexican cars to Barbie dolls.
More than two decades after New Delhi unveiled ballyhooed governance reforms, India is still hobbled by one of the world’s most cumbersome legal systems and sclerotic state bureaucracies. India ranks just ahead of strife-torn Nigeria and Syria as an honest, efficient place to operate a business on the World Bank’s Doing Business Index, and lags the West Bank and Gaza.
Indian crop yields, in a country in which half the workforce relies on farm incomes, are actually in decline – a stunning reversal of the agricultural revolution of the 1970s. The culprit is a paucity of investment in water and transport infrastructure.
Matched against India’s rising middle class is the world’s largest poor population, estimated at between 400 million and 500 million. Half of all Indian children under age 5 suffer malnutrition. To put it mildly, a country that cannot adequately feed its people does not an economic juggernaut make.
China is a police state. Russia is reverting to one. And all five BRICS still share with the rest of the developing world the curse of being relatively dangerous places to live.
South Africa is among the most conspicuously violent of countries, while most of Brazil’s more than 1,150 rural activists killed in disputes over land ownership in the past two decades have been slain out of sight in the Amazon region. Even at that, the current 1,186 conflicts over logging, mining and agribusiness land claims afflict all Brazilian states.
For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/business/article/1178237–brics-a-hyped-concept-that-needs-to-be-retired