TOWARD A DIVERGING BRIC FUTURE — AND MINI-BRICS LIKE PH
Today,thehugepotentialoftheBRICSprevails.ChinaandIndiaareontrack,butBrazilandRussiaarenot,thanksto geopolitics.TheAseanmini-BRICS,includingthePhilippines,followinthehigh-growthfootprints.
IN the early 2000s, Goldman Sachs projected that the four largest emerging economies — Brazil, Russia, India and China, or the BRICS — would surpass the major advanced economies by the early 2030s. In turn, the Asean “mini-BRICS” — Indonesia, the Philippines and Vietnam — were projected to grow almost as fast.
When the firs BRICS summit took place in Yekaterinburg, Russia in 2009, the combined economic power of the BRIC countries amounted to barely 12 percent of the collective economic power of the major advanced economies, the Group of Six (G-6) — the US, Western Europe (Germany, UK, France, Italy), and Japan.
But where are the BRICS today — and the Asean mini- BRICS?
Projected vs actual growth
To gain a better understanding of what has happened, let’s compare Goldman Sachs’ original BRIC projections in the 2000s, which rested on the economic development in the 1980s and 1990s, with the actual BRIC prospects today, which are the net effect of the past quarter of a century.
What Goldman Sachs projected was a dramatic expansion of China whose gross domestic produc (GDP) was anticipated to grow more than 14-fold between 2000 and 2025. At the same time, India’s economy would increase by almost tenfold and was projected to grow relatively faster than China by the late 2010s. Brazil was expected to expand fivefold and Russia more than tenfold.
In the same time period, the United States, the largest advanced economy, was projected to expand more than twofold. Consequently, the BRICS growth momentum suggested strong catch-up growth in the largest emerging economies.
So, what has actually happened? Here’s the bottom line: If peaceful conditions prevail and trade protectionism can be kept in check, China could deliver more than expected, while India is on track as well. But the potential of Brazil and Russia, respectively, has been undermined by geopoltics (see figure).
How geopolitics undermines BRICS’ future
By the mid-2020s — again, assuming peaceful conditions and managed trade tensions — China’s economy could expand more than 17 times, relative to its size in 2000. It is set to surpass the size of the US economy in the 2030s, which may well be the key to the Obama military “pivot to Asia” in the early 2010s and to the Trump tariff wars more recently. While India’s growth trajectory has periodically slipped, it has been pushed harder by Prime