Author: Ali Wyne, Harvard University
Goldman Sachs announced in early February that Jim O'Neill, chairman of its asset-management division since 2010, will be retiring from the firm later this year.
That announcement, along with the upcoming summit of the BRICS later this month, offers a fitting opportunity to reflect on how well 'BRIC' (as it was known before South Africa joined the club in December 2010), has stood the test of time. Here is how O'Neill coined the term in November 2001:
[T]here are some very different estimates about the relative size and share of the world economy depending on which technique (PPP weights or current GDP weights), is used … The relative picture shifts dramatically when important emerging market economies are taken into account, particularly Brazil, Russia, India and China … for three of the four countries (China, India and Russia), their economies are more than three times bigger when using a PPP weighting rather than current GDP. Indeed on a PPP basis, China is the 2nd largest economy in the world, India the 4th largest and all four are bigger than Canada … China especially deserves to be in the 'G7 Club', and under some scenarios, so do others — certainly Brazil, Russia and India relative to Canada.
In recent years, as differences in the four countries' domestic conditions, political systems, economic outlooks and strategic objectives have grown more pronounced, expectations that the BRICs would achieve geopolitical coherence have diminished. On the 10th anniversary of the term's introduction, Philip Stephens cautioned that 'slotting rising states into neat categories betrays a western-centric world view that now obscures more than it illuminates'. Ian Bremmer argues that '[t]he most durable thing about the BRICs is the acronym itself … combining individual countries into classes based on catchy acronyms adds neither influence to their groupings nor insight into their futures'. Perhaps the most searing indictment to date comes from Ruchir Sharma: 'No idea has done more to muddle thinking about the global economy than that of the BRICs. Other than being the largest economies in their respective regions, the big four emerging markets never had much in common'.
A comparable judgment comes from Lee Kuan Yew, whom the Wall Street Journal recently called 'Singapore's philosopher-king'. Last March, I accompanied Graham Allison and Robert Blackwill to Singapore as part of an effort to complete a book that we published last month, Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World. When we asked him if the BRICs would 'gain influence as a bloc over time', he replied:
As a counterweight, yes — they will be able to prevent excesses by the Americans and the Europeans — but otherwise no. They are different countries on different continents that happen to be growing faster than other combinations of countries on those continents, so somebody said: why not bring them all together and make them into a global force? Sure, China will buy soybeans from Brazil. It is a growing country that needs resources and can pay for them. But the Chinese and Indians do not share the same dreams.
Talking in September 2010 with Paulo Alberto da Silveira Soares, then Brazil's ambassador to Singapore, Lee declared: 'They are totally different countries, with totally different opportunities, totally different backgrounds, and totally different futures'.
By virtue of their catchiness and conciseness, terms such as 'BRIC' are susceptible to misappropriation, often taking on meanings that their creators did not intend. In November 2011, O'Neill noted that he 'never suggested that they [the BRIC countries] should operate alone as a political club, and other than highlighting the inadequacies of the current G7, etc, the purpose of such a club — especially now [that] South Africa is included — seems a bit limited'. Furthermore, in a social media-driven marketplace of ideas that sometimes appears to prioritise the speed with which analysis is issued over the quality thereof, constructs are increasingly offered in place of the insights that they are supposed to provide. While it is appropriate to ask why O'Neill focuses on Brazil, Russia, India and China, he has often explained his rationale at length and proceeded to offer detailed assessments of global economic trends; too many individuals who have taken to his term, however, use it as a substitute for, rather than a gateway to, deeper analysis.
Overdependence on a construct also risks rooting one in an outdated worldview. While 'BRIC' was coined to capture the growing importance of emerging markets, it soon became clear that 'emerging' was a dubious way to characterise China's economy — now the world's second largest, and on track to overtake America's in the next 15 years or so (incidentally, O'Neill now speaks of 'growth markets' — not only in the BRICs, but also in Mexico, Indonesia, South Korea and Turkey).
The observations of Stephens, Bremmer, Sharma, and Lee, among others, offer a cautionary tale about the lure of creating constructs and the limits to using them. While there is, of course, great virtue in making complex ideas accessible, simplification should illuminate, not obfuscate.
Ali Wyne is an associate of the Harvard Kennedy School's Belfer Center for Science and International Affairs and a contributing analyst at Wikistrat.
The author explores the terms 'Chindia' in 'The Chindia Illusion', National Interest (23 July 2009) and 'Asian Century' in 'A Skeptical View of Asia's Rise', Global Asia (Vol. 4 Issue 3, September 2009).