O fracasso do Brics como ideia e como resultados práticos - Jim O'Neill (The Telegraph)

 Will the BRICS Ever Grow Up?

In the two decades since Brazil, Russia, India, and China were recognized for their unique growth potential, they, along with South Africa, have so far proven incapable of uniting as a meaningful global force. This comes at the expense not only of the bloc, but of better global governance as well.

Jim O’Neill

The Telegraph, Londres – 16.9.2021

 

 Having created the BRIC acronym to capture the collective potential of Brazil, Russia, India, and China to influence the world economy, I now must ask a rather awkward question: When is that influence going to show up? Given today’s global challenges and the enormous issues facing the BRICS (which subsequently became a real-world entity and was expanded in 2010 to include South Africa), the bloc’s ongoing failure to develop substantive policies through its annual summitry has become increasingly glaring.

This November will be the 20th anniversary of the BRIC acronym, which I first used in a 2001 Goldman Sachs paper entitled “Building Better Global Economic BRICs.” At the time, I offered four scenarios for how each country could develop over the next decade, and made the case for why global governance needed to become more representative and include these four rising powers.

That paper was followed by a series of others, starting in 2003, which showed how China’s economy could become as large as the US economy (in nominal dollar terms) by 2040; how India could surpass Japan to become the third-largest economy soon thereafter; and how the BRIC economies together could grow larger than the G6 (the G7 minus Canada).

But the bloc’s economic trajectory since 2001 has been a mixed bag. While the first decade was a roaring success for all four countries, with each surpassing all four scenarios that I originally outlined, the second decade was less kind to Brazil and Russia, whose respective shares of global GDP have now fallen back to where they were 20 years ago.

If it weren’t for China – and India, to some degree – there wouldn’t be much of a BRIC story to tell. Yet, notwithstanding the difficulties the BRICs have faced, China’s growth alone is on track to lift the technical aggregate of all four economies to match the size of the G6.

In terms of global governance, the only notable shift over the past two decades has been the rise of the G20 since it took center stage in the response to the 2008 global financial crisis. Representing the world’s 20 largest economies, the organization seemed immensely powerful at the time, and it managed to implement policies of potentially lasting importance. But since then, it has generally been a disappointment, saying much but achieving very little.

With the world on track to reach 1.5°C of planetary warming by 2040, the Paris agreement’s preferred climate scenarios are slipping out of reach. Countries, cities, businesses, and financial institutions must move quickly to address the increasingly urgent climate adaptation and mitigation challenges. At Building the Green Consensus, distinguished speakers will explore how new regulatory frameworks and public finance can be used to accelerate private-sector investment in the green transition. 

For their part, the BRICs held their first annual meeting as a political club in 2009, in Russia (the first to include South Africa took place in China in 2011). And this year, Indian Prime Minister Narendra Modi hosted the BRICS leaders (virtually) for their 13th summit. Every leader made bold statements about what they had supposedly achieved together, and all discussed avenues for future cooperation. Yet they have accomplished very little; lofty statements are usually accompanied by only scant policy moves.

Nothing in the bloc’s latest joint declaration suggests that anything has changed. Perhaps not surprisingly, most of the attention this year has been on security and terrorism. After all, recent developments in Afghanistan will have serious, direct implications for Russia, India, and China. But this singular focus is disappointing nonetheless, because it highlights the group’s limited joint ambitions.

Modi would seem to agree, saying, “We need to ensure that the BRICS are more productive in the next 15 years.” Beyond creating the BRICS Bank, now known as the New Development Bank, it is difficult to see what the group has done other than meet annually.

Following the bloc’s rather dismal second decade, there are many things that BRICS leaders could do collectively to help revive the kind of economic gains made in the first decade, all of which would be good for the rest of the world, too. In doing so, they could create a much stronger impression of their usefulness alongside the G20, strengthening the case for more substantive reforms to global governance.

For starters, the BRICS need to strengthen trade between themselves. China and India could both gain enormously from a more open and ambitious trading relationship, which would redound to the benefit of the rest of the region, the other BRICS, and the world. In fact, more India-China trade alone would visibly boost global trade.

Moreover, while the BRICS have little in common other than large populations, they also share a significant exposure to infectious diseases. The Review on Antimicrobial Resistance that I led in 2014-16 showed that all of the BRICS were worryingly vulnerable to drug-resistant tuberculosis. And as COVID-19 has shown, most have health systems that are poorly equipped to deal with pandemics. Unless they treat global infectious diseases more seriously, they will never be able to reach their economic potential.

Since the fall of 2020, I have had the privilege of serving on the World Health Organization’s independent Pan-European Commission on Health and Sustainable Development, which is chaired by former Italian Prime Minister Mario Monti. One crucial proposal from our initial Call to Action this past spring, now outlined in detail in our final report, is to establish a Global Health and Finance Board under the auspices of the G20. The reasoning is simple: unless we place global health challenges at the heart of regular economic and financial dialogue, we will remain ill prepared for them. And as the pandemic has shown, global health challenges are also economic and political challenges.

This proposal already has the support of several key governments, notably those of the United Kingdom, the United States, France, Italy, and the European Union. Yet for reasons I fail to understand, the BRICS, especially China, seem to be opposed to it. Such resistance makes no sense and will have dire consequences for the rest of the world. It gives me and other longtime champions even more reason to doubt the group’s collective potential. (P.S.)

 

Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK treasury minister, is a member of the Pan-European Commission on Health and Sustainable Development.

Você apostaria o seu futuro numa criptomoeda? O inventor do BRIC não tomaria esse risco: Jim O'Neill (The Telegraph)

Eu não apostaria minha pouquíssima fortuna numa moeda digital, tão voláteis são esses ativos financeiros.

The Bitcoin Lottery

The sudden rise of "special purpose acquisitions companies" and cryptocurrencies speaks less to the virtues of these vehicles than to the excesses of the current bull market. In the long term, these assets will mostly fall into the same category as speculative "growth stocks" today.

Jim O’Neill

The Telegraph, Londres – 10.3.2021

 

 I was recently approached about setting up my own “special purpose acquisition company” (SPAC), which would allow me to secure financial commitments from investors on the expectation that I will eventually acquire some promising business that would prefer to avoid an initial public offering. In picturing myself in this new role, I mused that I could be doubly fashionable by also jumping into the burgeoning field of cryptocurrencies. There have been plenty of headlines about striking it big, quickly, so why not get in on the action?

Being a wizened participant in financial markets, I declined the invitation. The rising popularity of SPACs and cryptocurrencies seems to reflect not their own strengths but rather the excesses of the current moment, with its raging bull market in equities, ultra-low interest rates, and policy-driven rallies after a year of COVID-19 lockdowns.

To be sure, in some cases, pursuing the SPAC route to a healthy return probably makes a lot of sense. But the fact that so many of these entities are being created should raise concerns about looming risks in the surrounding markets.

As for the cryptocurrency phenomenon, I have tried to remain open-minded, but the economist in me struggles to make sense of it. I certainly understand the conventional complaints about the major fiat currencies. Throughout my career as a foreign-exchange analyst, I often found that it was much easier to dislike a given currency than it was to find one with obvious appeal.

I can still remember my thinking during the run-up to the introduction of the euro. Aggregating individual European economies under a shared currency would eliminate a key source of monetary-policy restraint – the much-feared German Bundesbank – and would introduce a new set of risks to the global currency market. This worry led me (briefly) to bet on gold. But by the time the euro was introduced in 1999, I had persuaded myself of its attractions and changed my view (which turned out to be a mistake for the first couple of years, but not in the long term).

Similarly, I have lost count of all the papers I have written and read on the supposed unsustainability of the US balance of payments and the impending decline of the dollar. True, these warnings (and similar portents about Japan’s long-running experiment in monetary-policy largesse) have yet to be borne out. But, given all this inductive evidence, I can see why there is so much excitement behind Bitcoin, the modern version of gold, and its many competitors. Particularly in developing and “emerging” economies, where one often cannot trust the central bank or invest in foreign currencies, the opportunity to stow one’s savings in a digital currency is obviously an inviting one.

By the same token, there has long been a case to be made for creating a new world currency – or upgrading the International Monetary Fund’s reserve asset, special drawing rights – to mitigate some of the excesses associated with the dollar, euro, yen, pound, or any other national currency. For its part, China has already introduced a central bank digital currency, in the hopes of laying the foundation for a new, more stable global monetary system.

But these innovations are fundamentally different from a cryptocurrency like Bitcoin. The standard economic textbook view is that for a currency to be credible, it must serve as a means of exchange, a store of value, and a unit of account. It is hard to see how a cryptocurrency could meet all three of these conditions all of the time. True, some cryptocurrencies have demonstrated an ability to perform some of these functions some of the time. But the price of Bitcoin, the canonical cryptocurrency, is so volatile that it is almost impossible to imagine it becoming a reliable store of value or means of exchange.

Moreover, underlying these three functions is the rather important role of monetary policy. Currency management is a key macroeconomic policymaking tool. Why should we surrender this function to some anonymous or amorphous force such as a decentralized ledger, especially one that caps the overall supply of currency, thus guaranteeing perpetual volatility?

At any rate, it will be interesting to see what happens to cryptocurrencies when central banks finally start raising interest rates after years of maintaining ultra-loose monetary policies. We have already seen that the price of Bitcoin tends to fall sharply during “risk-off” episodes, when markets suddenly move into safe assets. In this respect, it exhibits the same behavior as many “growth stocks” and other highly speculative bets.

In the interest of transparency, I did consider buying some Bitcoin a few years ago, when its price had collapsed from $18,000 to below $8,000 in the space of around two months. Friends of mine predicted that it would climb above $50,000 within two years – and so it has.

Ultimately, I decided against it, because I had already taken a lot of risk investing in early-stage companies that at least served some obvious purpose. But even if I had bet on Bitcoin, I would have understood that it was just a speculative punt, not a bet on the future of the monetary system.

Speculative bets do of course sometimes pay off, and I congratulate those who loaded up on Bitcoin early on. But I would offer them the same advice I would offer to a lottery winner: Don’t let your windfall go to your head. (Project Syndicate)

 

Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK treasury minister, is Chair of Chatham House.

O BRIC nao existe, mas alguns insistem na fantasia, como Jim O'Neill,por exemplo

O autor da sigla insiste na ficção, falando desse grupo absurdo como se fosse uma realidade tangível, no qual o crescimento fosse pré-ordenado para mostrar convergência de conjunto. Esse absurdo, essa total falta de lógica, essa fantasia econômica  é seguida por muitos patetas ao redor do mundo, a começar por gente que é paga com o nosso dinheiro para, no mínimo, não ser pateta, justamente. Mas o que se pode fazer quando as pessoas são esquizofrênicas o suficiente para acreditar em contos de fada econômicos? Só desejar que o sonho acabe e que se possa voltar o mais rapidamente para a realidade.

Paulo Roberto de Almeida 

Status de Bric do Brasil pode ser questionado', diz Jim O'Neill

Para criador do termo Bric, um terceiro ano seguido de crescimento baixo deve fazer mercado colocar posição em dúvida 

Álvaro Campos - O Estado de S.Paulo, 13/12/2013

O ex-presidente do Goldman Sachs Asset Management, Jim O'Neill, avisa que um eventual terceiro ano seguido de crescimento fraco, em 2014, colocaria o "status Bric" do Brasil em dúvida. O'Neill foi o criador, em 2001, do termo Bric, em estudo que apontava Brasil, Rússia, Índia e China como economias potencialmente dominantes no mundo em 2050.

Segundo ele, o Brasil precisa permitir que o setor privado possa investir e competir - na sua avaliação, o País deve parar de imitar a velha China, ao usar a máquina do Estado para tentar impulsionar o crescimento econômico. "É preciso mudar", diz. A seguir, os principais trechos da entrevista:

Quais são as perspectivas para os países do grupo Bric em 2014? Como ficará o crescimento econômico e quais serão os principais desafios?

A China e a Índia vão obviamente crescer mais, como sempre acontece em relação aos outros países do Bric. Eu acredito que a China vai crescer entre 7,5% e 8% e essa trajetória é bem clara - e impressionante. O caminho da Índia é bem menos claro. Pode haver uma nova desaceleração, mas meu palpite é que a Índia pode surpreender positivamente no próximo ano e crescer na faixa entre 6% e 7%. Como temos visto recentemente, as pessoas estão animadas com a possibilidade de mudança de governo e, se isso realmente acontecer, os investimentos podem acelerar. O potencial de longo prazo da Índia continua muito forte. Para Brasil e Rússia, 2014 será importante, já que ambos tiveram dois anos seguidos de crescimento decepcionante e, se isso acontecer pelo terceiro ano, cada vez mais as pessoas vão começar a questionar o status deles como Bric.

A normalização da política monetária dos Estados Unidos é boa ou ruim para os países emergentes, já que sugere que a maior economia do mundo está se fortalecendo?

Se o Federal Reserve (Fed, o banco central americano) estiver normalizando suas políticas, então isso significa que algo deve estar melhor sobre a economia dos Estados Unidos, o que é uma boa notícia. Eu acho que os EUA vão crescer 3% ou mais no próximo ano, então eles certamente vão reduzir os estímulos monetários e talvez adotar alguma outra medida. Isso significa que existem riscos para todos aqueles que sobrevivem somente graças às taxas de juros artificialmente baixas. A mudança vai forçar os investidores a distinguir entre as economias emergentes onde os fundamentos estão bons e aquelas com fundamentos menos positivos.

A mudança no modelo de crescimento da China - para uma economia mais voltada para o mercado doméstico - terá grande impacto em outros emergentes, como o Brasil, que exporta bilhões de dólares para o país?

A nova China é muito mais focada na qualidade do crescimento, e não na quantidade. Isso não é bom para a maioria das commodities, especialmente aquelas relacionadas à indústria. Países que se beneficiaram da "velha China" precisam se adaptar, pois as coisas não voltarão a ser como antes. Por outro lado, isso será bom para países que lutam para competir com a China devido aos salários baixos no país, que já estão subindo. Isso parece que será melhor para o México, por exemplo.

Quais serão as "estrelas emergentes" no próximo ano? México, Indonésia e Turquia parecem estar em quase todas as listas de mercados promissores. 

Eu concordo. É o chamado grupo Mint (formado por México, Indonésia, Nigéria e Turquia). Eu viajei para esses quatro países nos últimos três meses e retornei especialmente animado com México e Nigéria.

Todos os países do chamado grupo dos "cinco frágeis" (Brasil, Índia, Indonésia, Turquia e África do Sul) terão eleições gerais no próximo ano. Isso pode ser um fator de risco?

Eleições são sempre muito importantes. Isso é especialmente verdade nos casos de Índia, Indonésia e Turquia. Esses países têm enorme potencial, mas precisam de governos que possam focar na governança e implementação de reformas. O mesmo, é claro, vale para o Brasil e a África do Sul, mas o potencial dos outros três é muito maior. Eu acho que a expressão "cinco frágeis" é divertida, mas não exatamente correta. As economias emergentes podem perfeitamente ter déficits em conta corrente, já que se espera que atraiam capital - se fizeram as coisas certas.

O déficit em conta corrente continuará sendo um dos maiores problemas para algumas economias emergentes no próximo ano? 

Essa é uma afirmação complicada. Na verdade a grande questão é o tamanho do déficit. O déficit do Brasil não é um grande problema, nem o da Índia. Se a Índia introduzir mais reformas, sua moeda vai se valorizar, em função da grande entrada de capital, especialmente por meio de investimento estrangeiro direto (IED). Eu acho que os déficits em conta corrente de Turquia e Indonésia são grandes demais, mas graças a mudanças que já estão sendo implementadas, esses déficits já estão diminuindo.

Analistas acreditam que o governo brasileiro não deve promover um aperto fiscal significativo no próximo ano, para não prejudicar a atividade econômica em um ano de eleição. Isso pode elevar os custos de financiamento e pressionar as métricas de dívida?

O Brasil precisa focar muito mais em permitir que o setor privado possa investir e competir. O governo está tentando muito imitar a China, ao usar demais o Estado para gerar crescimento. Isso está ultrapassado, nem mesmo os chineses querem imitar a China mais. É preciso mudar.

O sr. acredita que a Copa do Mundo de Futebol e os Jogos Olímpicos vão ajudar a economia brasileira nos próximos anos?

Não. Existem pouquíssimas evidências de que tais eventos tenham realmente ajudado os países-sede. Mesmo assim, isso geralmente é bom para a autoconfiança. Eu acho que, no caso do Brasil, é realmente importante vencer a Copa do Mundo, mas com a força das seleções da Espanha e Alemanha, isso será muito difícil.

O Banco Central brasileiro e as autoridades monetárias de outros emergentes estão certos em intervir no mercado de câmbio para tentar conter a volatilidade provocada pela redução dos estímulos do Federal Reserve?

Talvez. No entanto, o fato é que o Brasil precisa ter como prioridade absoluta, na questão monetária, cumprir suas metas de inflação. Isso é muito mais importante do que a oscilação do real. Mais amplamente falando, eu não tenho muita simpatia por emergentes que reclamam das políticas do Fed. O trabalho do Fed é implementar políticas para os EUA. Se os outros países não gostam disso, eles precisam desenvolver melhor seus próprios sistemas monetários e mercados, para se tornarem menos dependentes.