A successful neighbour helps but not as much as a growing population, finds Duncan Weldonby Duncan Weldon / June 16, 2016 / Leave a comment
Published in July 2016 issue of Prospect Magazine
The Rise and Fall of Nations: Ten Rules of Change in the Post-Crisis World
by Ruchir Sharma (Allen Lane, £25)
Fifteen years ago, Jim O’Neill, then at Goldman Sachs and now a Treasury Minister, coined the term “BRIC” in a paper outlining how economic power was shifting from the G7 group of advanced economies towards the rising nations of Brazil, Russia, India and China. Those four countries never had much in common but the term caught on. It even prompted those states (later joined by South Africa to make BRICS) to hold summits and to launch a multilateral bank—possibly the world’s first case of an international organisation being born from an investment bank research note. But just as with the example of Japan—which in the 1980s was praised as the economic model of the future, before it experienced a profound financial crisis and instead became a cautionary tale—the original BRIC thesis is looking rather worn. Russia and Brazil are mired in recession, China’s growth has slowed sharply and only India’s prospects still look as rosy.
Much global economic commentary consists of taking an existing (and often recent) trend and projecting it forwards. Japan grew swiftly from the 1950s to the 1980s and so it was thought that this would inevitably continue. China experienced three decades of record-breaking growth and so the same assumption was made. By contrast, countries that have recently struggled…