Jim O'Neill: a response to the ORF BRICS report

I thank the South African Foreign Policy Initiative for asking me to comment on this paper (A long-term vision for BRICS, by Samir Saran, Ashok Kumar Singh and Vivan Sharan, Observer Research Foundation) which is one of the most detailed that I have seen on trying to guide the BRICS countries to have more common purpose as well as continue their rise to power. I welcome their general recommendations, in particular two areas. 

Firstly, it is still quite remarkable that the BRICS countries have very little power and/or influence in the world’s major governance organisations and until that situation changes, it is difficult to believe that the world economy (or society ) is being ran optimally. This was the exact purpose of my original article on the BRIC economies back in 2001, and it was obvious then, and it is even more clear of course today. Each of the IMF, World Bank and the UN needs the BRICS countries to have a bigger say and influence as the authors make clear. Before the end of 2015, despite their slower pace of growth, the BRICS economies will be collectively as big as the US and Europe, so they should have more influence, clearly. 

One area where I think more needs to be explored is whether the BRICS countries, or at least all of them, are ready to take the responsibility that comes with that greater importance. Here China’s role is obviously critical given its size and its unique structure as a society. Some times one wonders whether they are happy to support the broad statements calling for more BRICS influence, but do they really want to exercise such influence and respond to the greater leadership demands that come with it?

It is never easy, as our friends in Europe often show when they like the prestige of power but quite often, struggle to effectively exercise it. In this regard, and directly related to the BRICS having greater influence in global governance, the space will only be truly created as and when the Europeans are prepared to give up something. I hope it isn’t another 12 years.

The second area that I commend the report relates more to the challenging micro economic issues facing each and all of the BRICS economies. It is quite easy as I have found to elaborate about the exciting potential for all these economies, especially when one thinks of their population and dynamics that go with it. But in order to turn this potential into reality and for their dreams to be realised, most of them have to do a lot more on the tricky areas of productivity and sustainable growth.

I believe this is an area for the BRICS Development Bank to explore once it is up and running and it could give it purpose. Rather than just focusing on physical infrastructure projects, it might more imaginately also think about projects to boost and improve educational opportunities in their societies especially for those most disadvantaged, as supported by implications in the report. In my view, this should apply to both primary and tertiary education in particular. Without their people getting a robust educational chance, they will never reach their conceptual potential. Without their people being better educated, nor probably will it be possible for ambitious leaders to improve the rule of law, reduce corruption and have stronger overall governance, probably the absolute most difficult challenge for these countries.

The other area within sustainable growth that a BRICS Bank might spend some focused efforts relates to technological infrastructure. As I have often commented to policymakers in many BRICS and other large emerging economies, South Korea is a particularly strong example for many to follow and think about. Of around 180 economies that I have monitored this area for historically, South Korea is absolutely the best at spreading the most useful technologies for its people. This would be quite easy for the BRICS leaders to embrace as a goal for themselves, and execute it through the Development Bank.

I couldn’t finish without a brief comment about South Africa. As most people know I never suggested that South Africa should be part of the club nor do I believe it is entirely justified based on economic size or population, nor do I really believe all sub Saharan African countries will regard South Africa as their representative. But they are part of the club and the start of the BRICS Bank gives the country to justify its presence through any positive influences it can bring.

*  SAFPI would like to thank Jim O'Neill for his willingness to engage with the Observer Research Foundation report and to do so at short notice, in a congested schedule. Thanks Jim!

  • Related commentaries

'A long term vision for BRICS' released (Business Standard)

Building better global economic BRICs, Jim O'Neill, Global Economics Paper No 66, Goldman Sachs, 2001

A long-term vision for BRICS, by Samir Saran, Ashok Kumar Singh and Vivan Sharan, Observer Research Foundation, August 2013.

*  SAFPI's RSS feed on BRICS issues and our BRICS knowledge hub

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