When we launched Conversis, some 8 years ago now, I remember talking about the rise of the BRIC (Brazil, Russia, India, China) countries. At that time I was discussing their inexorable rise and how the face of the Global economy was to change over the next 50 years.
Well, recent events tell us that we are living through that change now, far quicker than any of us predicted just those 8 short years ago. G7 countries are all facing challenges in their economies. By the skin of their teeth the USA got the necessary agreement on the debt ceiling, but its troubles are not over. Interestingly, it maintained its credit rating (albeit with warnings) with all major rating agencies bar Dagong in China.
The prospects in Europe, if anything are gloomier.? Crises in Ireland, Greece, Portugal and dire warnings of similar collapses in Italy and even Spain dominate a continent where youth unemployment in some countries has hit 40%. Japan has been overtaken by China as the world?s second largest economy and attempts to spend its way out of economic crisis has failed to revive its economy.
In contrast the BRIC countries prosper in relative terms. I was recently re-reading Goldman Sachs excellent paper from May last year ? ?Is this the BRIC?s decade??? Most striking was the rise of the middle classes in these economies. Their increasing spending power is a real driver for world economic growth. China has already surpassed the USA as the world?s leading automotive buyers. As I was saying 8 years ago, we are just beginning to feel the economic, social and cultural impact of these rapid changes. Exciting times.