After BRIC comes MIST
The four BRIC countries, together with the USA, comprise the five most influential economies in the world today based on three traditional economic drivers:
The total area of their country (in square kilometres)
Russia – 17.1 million
USA – 9.8 million
China – 9.6 million
Brazil – 8.5 million
India – 3.3 million
Their large populations
China – 1.3 billion
India – 1.1 billion
USA – 310 million
Brazil – 192 million
Russia – 142 million
The availability of capital (as measured by the size of their GDP)
USA – US$14.72 trillion
China – US$5.89 trillion
Brazil – US$2.09 trillion
India – US$1.65 trillion
Russia – US$1.51 trillion
Based on these three economic factors, the fours BRICs, together with the USA, stand far ahead of all of the other economies in the world which explains why, as a group, they are so important and influential from both an investment, business and, more recently, a geo-political perspective.
It is very important to keep this in mind when reacting to shorter term perspectives and commentary from the media, market analysts and economic pundits!
In January this year, the Leaders of the four BRIC countries (who now meet at least once a year as a Leaders group, and maintain a regular dialogue on global economic policy) decided to invite South Africa to join their annual Leadership Forum and to participate in other BRIC Forums (for example, a study commissioned by BRIC finance ministers and central bank governors would now include inputs from South Africa as well).
This announcement caused economic commentators, bloggers and others to start speculating about whether BRIC should now be referred to as BRICS and whether in fact South Africa deserved a place at the table alongside these four large emerging economic super-powers.
Jim O’Neill, now chairman of Goldman Sachs Asset Management and creator of the BRIC acronym in 2001, was clearly surprised by this announcement and was quoted as saying, “While this is clearly good news for South Africa, it is not entirely obvious to me why the BRIC countries should have agreed. South Africa rightly sees itself as a leading emerging nation, and that explains their motive.
“Furthermore, their historic trade ties with Brazil and India would justify South Africa wanting to be part of any ‘club’ that relates to trade relations between them. Of course, the rapid growth in trade between China and Africa, South Africa included, can explain much of their motive also.
“When I created the acronym, I had not expected that a political club of the leaders of the BRIC countries would be formed as a result. In that regard, the purposes of the two might be regarded differently and more so after this news.
“As far as the economics are concerned, South Africa is one of the more wealthy nations in Africa, and is currently the largest in US$ terms at around $350bn. However, this is quite small, not only by BRIC standards, but compared to some others.
“For example, Russia is around $1,600bn, nearly five times larger than South Africa, and India is currently similar in size to Russia. Brazil is currently closer to $2bn in size, while China is considerably larger at around $5,500bn. Importantly, there are a number of other economies from the so-called emerging world that are bigger than South Africa. This would include Indonesia (approximately $700bn), Mexico ($1,050bn), Turkey ($725bn) and South Korea ($1,000bn).