At the turn of the century Goldman Sachs introduced the BRIC concept, “the idea that the emerging markets of Brazil, Russia, India and China would come to play a new and more muscular role in the global economy.” Now a leading economist at Goldman Sachs, Jim O’Neill, has written that the latest economic shock has tested the BRIC concept and that all members have passed with flying colors.
These emerging economies, whose combined GDP is expected to surpass that of the G7 countries by 2027, survived for many reasons. For one they were quick to react; China stimulated domestic demand as exports to the US and Europe declined while Brazil, learning from past crises, was able to stay calm, reining in inflation and assuring foreign investors even as commodity prices fell. India, on the other hand, pursued vigorous economic reforms and invested in infrastructure. Russia fared less among its peers in BRIC, but it has at least pinpointed it weaknesses and is now focusing on issues such as fostering the rule of law and boosting efficiency.
Now Goldman Sachs is predicting the rise of another group, named N11 or “Next 11”, which is composed of countries that have also weathered the storm and emerged from the crisis in a better shape. They include Indonesia, Nigeria, Mexico and Turkey. Each has something going for it and together, along with BRIC, is changing the traditional landscape of world economy.
Where do we, as Arabs fit in all this? The crisis has come and is now slowly moving away but we have failed to learn its lessons or prepare for what could come in the future. Many in Jordan still live in denial while others continue to preach us about cycles and close-calls. But few dare raise the right questions about our economic policies of the past few years, and our road-map for the future.
This is the time to ask these questions and perhaps chart a new economic course. We need to look at the policies of BRIC and N11 and deduce the right lessons.