13 years on, should 'BRIC' now be shortened to 'IC'?
Jim O'Neill, the economist famous for coining the acronym 'BRIC' in reference to emerging markets Brazil, Russia, India and China, opened his lecture at City University London with the resonant phrase, "The way the world economy is changing is very difficult for even the most experienced observers and journalists to appreciate."
His comments follow the recent International Monetary Fund (IMF) announcements that cut global growth forecasts to 3.8% and predict weak and uneven growth over the next year.
Speaking to a packed auditorium, O'Neill described how China and India have emerged as the strongest of the four BRIC's since he coined the phrase back in 2001. The Chinese economy is now bigger than that of the US and one and a half times bigger than the other three BRIC's combined.
But why China and India rather than Brazil and Russia?
O'Neill identifies the latter economies' dependence on commodity markets as the reason they have not performed as well as might have been expected. He notes that China's switch away from an economy reliant on large amounts of exports and India's new leadership are indicators of why their economies are performing more strongly post-financial crisis.
Juxtaposed against the performance of the emerging markets, O'Neill expressed grave concerns over the Eurozone. "The performance of the Eurozone is pitiful," he said, "the longer this continues the more concerning things are going to get."
Perhaps most importantly for the large number of students in the audience, O'Neill was keen to point out that when analysing the world economy it was important to differentiate between economic cycles (such as the recession post-financial crisis) and underlying economic trends, (such as the emergence of China as a global economic power) and that despite all the turbulence of the past few years, world GDP has grown more in the last decade than in the previous two.
Steve Schifferes, Marjorie Deane Professor of Financial Journalism at City who hosted O'Neill says, "The shift in the centre of gravity of the world economy that Jim O'Neill has outlined in his talk is of profound importance for us all. His call for journalists to think more deeply about the bigger forces affecting economic growth rather than short-term fluctuations is spot-on."
For details of the figures O'Neill used in his presentation, please download his slides