Twenty years have passed, the BRIC countries have disappointed
The author is a former chief economist at Goldman Sachs and served as the British Treasury Secretary in David Cameron’s government.
Since my past 20 years Published papers It formally grouped emerging economies such as Brazil, Russia, India, and China, and coined the term “BRIC countries” to describe them. I think that since these countries are likely to continue to maintain amazing GDP growth in the next ten years, we urgently need them to play a greater role in global governance. As France, Germany and Italy join the permanent economic and monetary union, I propose to merge their separate seats in the G7 and their corresponding representatives in the IMF and the World Bank into one European seat, which will allow the BRIC countries to join the slightly enlarged European seats make way. G7.
Until 2003, my team published another article entitled “Dreaming with the BRICS”, We assume that these four countries can collectively become a larger economy than G6 (excluding Canada). Our timing is accidental and coincides with the globalization boom, which means that many international companies are doing more business in the BRIC countries.
A few years later, the financial crisis finally inspired the long-overdue global governance changes. My proposal to merge the large mainland economies into one representative has never been realized. But in response to market turmoil, then US President George W. Bush convened the G20 in 2008-the group includes four BRIC countries. A year later, Gordon Brown, then Prime Minister of the United Kingdom, chaired the enlarged group in London, consolidating its central role in global economic and financial affairs.
The launch of the Financial Stability Forum — which subsequently became the Financial Stability Board in 2009 — and the rebalancing of the voting and ownership shares of the International Monetary Fund and the World Bank also seem to be important. All of these have impressed me deeply. They are important developments towards greater common prosperity and a more representative form of global governance in the future.
What a disappointment, another ten years have passed in November 2021 and absolutely no progress has been made. The mandatory five-year review of special drawing rights-which may increase the objective representation of major emerging currencies to reflect their growing strength-has been postponed. Due to the US-China competition, the G20 itself now seems to be divided. Very few people seem to finish.
This is particularly worrying because although International Monetary Fund Forecast Developed economies will not suffer major damage after the pandemic. Except for China, the growth rate of emerging markets is expected to be much lower than expected before the coronavirus outbreak.
Not only was the G20 unable to agree on a fair plan for the distribution of Covid-19 vaccines, but some members also opposed the establishment of a new global financial and health committee, which would strengthen the world’s ability to respond to future health challenges. The most worrying thing is the failure to play a leading role in the 1.5C climate change target (the core feature of this month’s COP26 summit).
Of course, the leaders of the BRICS countries also established their own economic and political clubs in 2009, and South Africa’s accession made it a “BRIC country”-a development that promoted the popularity of this acronym. But apart from setting up another development bank, they hardly coordinated policies to promote their collective economic efforts. They also did not make constructive contributions to the global common interest within the G20. This is also disappointing.
China is the only BRIC country to exceed its growth expectations, and India is not far from meeting its expectations. However, due to the bleakness of the second decade, neither Brazil nor Russia has a greater share of the nominal dollar in GDP than in 2001. How these countries successfully transition to a higher income state in the whole society remains a huge challenge. unsolved.
For those countries that are truly eager to achieve this goal, South Korea remains the only shining example. In my career, it is the only country whose economy has developed to the same level of prosperity as its citizens in southern Europe. No other country with a population of more than 45 million has come close.
Countries such as Brazil, Russia, Indonesia, Nigeria, and Vietnam should emulate Seoul’s economic success for their own societies. This will ultimately make their people richer and possibly happier, and it will also promote equality across the world.