Emerging Economic Powerhouses
10 years ago, the acronym, ‘BRIC’ – a grouping of emerging economies namely, Brazil, Russia, India, and China was coined by Jim O’Neill, of Goldman Sachs. Then, in 2012, South Africa was officially added to the club and so ‘BRIC’ became ‘BRICS’.
There is no doubt that these (and other emerging economic powerhouses) are forever changing the global landscape as a new world order emerges. There is some debate as to whether or not South Africa deserves to be included in this grouping as on the face of it there other nations who could better justify inclusion. South Korea, Mexico, Indonesia and Turkey could all make strong cases for inclusion.
South Africa is somewhat dwarfed by the other four BRIC nations. They have also each considerably out-performed South Africa when it comes to the rate of economic growth: For instance, China’s dollar value of GDP is creating the economic equivalent of a new South Africa every four months! O’Neill argues that South Africa justifies inclusion when considered as, ‘Africa’s representative’.
The Goldman Sachs index referred to the ‘Growth Environment Score’ – a straight-forward look at the national variables necessary for sustained growth and productivity. The index was recently given a face-lift to incorporate a further five variables in addition to the thirteen that made-up the original index. The eighteen variables can be split into six different categories: macroeconomic stability (government deficit, external debt and inflation), macroeconomic conditions (investment rate, degree of openness to trade), political conditions (corruption, rule of law and political stability), technology (mobile phones, personal computers, internets users and secure internet servers), microeconomic environment (cost of starting a business, urban population, patent applications and research and development expenditure) and finally, human life (life expectancy and schooling). In the 2011 index statistics South Africa scores 5.08 out of 10 with South Korea scoring an impressive 7.7 – which places this nation fourth out of a total of 183 countries that Goldman Sachs rate. What is interesting is that South Africa scores higher than both India and Russia in the 2011 figures.
What is your opinion on the BRICS?
Extracts from a blog by Keith Coats, CoFounder TomorrowToday