In scanning the papers it just dawned on me that the big story of the BRIC countries of a few years ago has waned in the past year or so. Do you remember when it was touted they were to be the up and coming economic forces globally, and for a while it, at least , looked that way. I remember when Japan ‘rose ‘ and there were dire warnings of Japan surpassing America, somewhat like the BRIC’s of recent past. As my wife reminded me, there are cracks in the BRIC.
Of course , we are referring to Brazil, Russia, India, and China.
Well, Brazil . It is in the midst of a bloody scandal involving their Government owned Petrobras , connecting officials in Government and possibly politicians. The oil price is down and their promising offshore is still promising in large part. Heavy borrowing is causing big problems with a slacking economy unable to offset this. Brazil has always been a promise. Yes, some great strides , but such a long way to go and corruption has always lingered in the corners.
Russia. Oil price again. One of the top global oil producers and ,hence , feeling the pinch, big time. Of course , their Putin led governance structure does not endear the investor to come in. On the contrary , hundreds of millions have been leaving the country.
India. Of the four India has remained more stable. There are still many ethnic and structural issues facing the world’s largest democracy , and it is still questionable whether Modi plans will succeed. But there is hope here, I think.
China. The mantra was that any day now and China will overtake the US as the largest economy. Well, the evolution from agrarian to industrial to consumer led economics is anything but smooth at the best of times. In the China context one has to add the ‘command economy’ matrix which one now sees in full bloom as the national bank prints more money to try and rejunvnate a maturing economy , controls are put on some investments including foreign , and the authorities deal with poor performing state entries , and vacant housing projects. The latest prediction by international bodies is that billions are now leaving the country.
So, three of the four are having real problems and the fourth, as we all know , is a long term project by almost everyone’s estimation.
As we learn every year , economics is an in exact science, especially when it is wrapped up in innumerable variables like ethnic issues, political factors , and trade difficulties , not to mention the price of essential goods.