The main challengers to US economic power – Brazil, Russia, India, and China – have overtaken US in dominating the global energy industry according to a global consultant’s study. The rising power of the four countries – the new economic tigers nicknamed the Bric is already evident in the metals and mining sector and is starting to be felt in insurance and consumer-related industries.
At the end of the first Gulf War in 1991, 55% of the 20 largest companies in the energy industry by market capitalization were American and 45% were European.But in 2007, 35% of the 20 largest energy companies are from Bric countries about 35% are European and about 30% are American the study said.
The Western financial crisis means the fast-growing economies of Brazil, Russia, India and China will grow their share of the world economy even faster than originally forecast opine some experts from companies like Goldman Sachs.
A Goldman Sachs economist who originated the term in 2003 to describe how the four rising economies are likely to rival and overtake many of the West’s leading economies over the next half century. Economists and Experts feel the financial crisis that began in US mortgage security markets was allowing the BRIC countries to take a bigger share of world gross domestic product. On a relative basis it definitely allows the BRICs to develop faster as they are going to take an even bigger share of GDP sooner.
This is a financial crisis of the West and we must not forget that of the world’s 6 billion people most of them are not affected by this. Some expert economists who were in India four weeks ago say there were no signs of India being affected by all of this.
China, India and Russia were actually growing faster than originally predicted by some research published in 2003. Of the four BRICs, Russia, China and India have all grown on average 2 pc more than expected. It is a hell of a lot so they are now collectively 16 pc of global GDP so it is all happening a lot quicker.
The four BRIC countries have been seeking to form a political club to convert their growing economic power into greater geopolitical clout as a growth strategy.In May in the Russian city of Yekaterinburg, the four sought to formalize their club at the first stand-alone meeting of BRIC foreign ministers. Western leaders now need to take note of that meeting and start to accelerate bringing them into the G8 club and the IMF because the world doesn’t want a separate club just looking after the growing countries the same as it doesn’t need an old club looking after the declining it needs a better club involving them both.
The lack of progress by the G8 and the Western leaders to change is really bad and is one of the biggest problems in the world today. The combined GDP of the BRIC countries could overtake the combined economic might of the G7.
According to Russian President, Russia will become one of the top five economies of the world by 2020, but admits the rule of law needs to be strengthened and corruption has to be rooted out. Russia should speed up some of its infrastructure projects and that corruption could sap Russia’s economic potential. At the core of it is a stronger self-confidence in a rule of law that everybody likes. In some ways Russia enjoys stability almost too much.
The Russian people like stability which, given Russia’s history, is very understandable and admirable but it should not come at the expense of things which are needed for private sector risk taking, which are stronger property rights and a stronger rule of law.