The power of the rapidly growing economies of Brazil, Russia, India and China in the last decade had caught the interest of overseas investors. This led to coining of the acronym BRICs in 2001 by Jim O'Neil, the former chief economist of Goldman Sachs. However in recent years, a number of developing nations have been afflicted with economic woes. Amongst them, Russia and Brazil have been adversely impacted by the meltdown in the commodities market. To add to this, economic sanctions against Russia and corruption scandal in Brazil have further exerted pressure on their economic growth. Even India and China have seen a moderation in economic expansion in the last two years. All this has cast a shadow on the prospects of the emerging market powerhouse of BRICS.
However, Jim O'Neil thinks otherwise. According to him, China and India will continue to be the growth drivers ensuring that BRICS remains a dominant force to reckon with in the global economy. China has been witnessing significant changes in its economic landscape. Old drivers of growth such as real estate and manufacturing have been hit by oversupply. But at the same time new-age hi-tech businesses such as internet, mobile and e-commerce have done exceedingly well in China. The humungous IPO by e-commerce giant Alibaba and business success by smartphone maker Xiaomi & internet company Baidu reflect their growing influence in the world. India, on the other hand, is expected to benefit from the reform-led growth policies and demographic advantage of a large young nation. Therefore, Jim O'Neil feels that the growing consumer markets of China and India will increasingly be the key for global consumption.
In fact the economist has said only China and India will remain the emerging superpowers if growth in Brazil and Russia fails to pick up by 2019. As per his projections, BRICS will grow as big as the Group of Seven Nations by 2035 backed by China and India that are likely to surpass US & France, respectively in size by then.