Coffee House

The rise of the BRICs and the fall of the JUUGs

2 March 2014

10:35 AM

2 March 2014

10:35 AM

It was back in 2001 that my good friend Jim O’Neill of Goldman Sachs coined the acronym ‘Bric’, short for Brazil, Russia, India, China. These were the emerging markets that were going to surpass the developed economies. And so they have.

Well, nearly. I, too, am partial to a good acronym and it has always seemed to me very unfortunate that there isn’t a matching one for the four biggest established economies. According to the International Monetary Fund, these are currently the United States, Japan, Germany and the United Kingdom (based on last year’s GDP figures).

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I therefore propose ‘Juugs’. The rise of the Brics and the fall of the Juugs has a good ring to it. According to one of the IMF’s measures — admittedly the one most favourable to emerging markets — the Brics have not quite overtaken the Juugs, but they will do within five years. The fact that their shares of global output are currently about the same (27 per cent compared with 31 per cent) is itself astonishing. Thirty years ago those shares were, respectively, 14 per cent and 45 per cent.


This is an extract from Niall Ferguson’s diary in this week’s Spectator.

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Show comments
  • alabenn

    Stick to reading and interpreting history, prediction is not your forte.
    You should know that almost all the advances in the last 2000 years have been European driven, what will drive the advances in the rest of the world when copying what has already been created runs out of possible improvements.
    Do not look to Muslims for advances, their ideology prevents original ideas being promulgated, it is a prison in which their minds are the inmates.
    In two thousand years what have the rest improved on, if there is a list it is very short.

    • Guest

      The west was only ascendent in the last 300 years, genius. Read your history. And this is red herring anyways.

      His main thesis is that the 4 biggest developing countries will have a bigger GDP the 4 biggest developed countries in 5 years, and the trend-line supports it. So if you have data to prove that he is wrong, then show it. Otherwise, keep your ill-informed white supremacist tripe to yourself, red herring or not.

      • alabenn

        So you signed in to write this reply, white supremacist tripe, nowhere did I mention white, but having said that I do not care what people like you think are my motives, I think the Greeks and Roman civilisations are a tad over 300 years, witless reactions like yours are the sum of your thinking. go away.

        • DDuana

          Did you forget something called the “Dark Ages”? And yes, only in the last 300 years did Western Europe climb out of the mess the barbarians created after taking over the Roman Empire, and truly expand outside Europe.

          As for the Greeks and Romans, they are nothing special. In fact, they are downright infantile compared to much older civilizations like the Egyptians, the Persians, the Indians, and the Chinese.

          Nevertheless, these are still red herring. The premise of the author is that the BRIC will only get richer over time, and it has geopolitical ramifications. For instance, the recent Russian incursion into Crimea, and China’s support for Russia. As the BRIC gets bigger, the G-7 will have trouble keeping control over them, as events in Ukraine can attest to that.

          And no, you go away, Lol.

          • alabenn

            the Persians, the Indians, and the Chinese,
            Besides big monuments to the dead and a wall, what advances did they make.

            • Guest

              I see you are still continuing your red herring. I will play along. Anyways, I have no idea what Roman
              advances you are referring to. Why don’t you make a list? And I will respond to your red herring if I feel like it. You already listed the Great Wall and the Pyramids. That is two more than what you have come up for the Romans.

  • fabulous intentions

    Has anybody besides me noticed the connection of the economic downfall of the PIGS ( Portugal , Ireland, Greece & Spain ) group coincides with them being the 4 most virulent EU supporters of the Palestinians & have the most recorded number of votes at the UN , EU & elsewhere specifically against Israel & in favour of Arab terrorist crimes.
    All I can say is there is such a thing as divine retribution after all !

    • monty61

      Eh?

      • fabulous intentions

        Yes its not a joke, is it a coincidence or not?

    • HookesLaw

      No amazingly none of us have. But then none of us are clearly as asinine as you. I suppose in the mist of all the nutjobbery printed on here you are encouraged to spout your innermost prejudice.

    • DDuana

      They are? Says who?

  • Bonkim

    What matters is GDP per capita – the BRICS are far far behind, including China. Russia may be in a decade or two India never. Given that the earth’s population is exploding and resources running out fast, comparison by GDP and consumption will be redundant soon. BRICS or JUUGS – all on the scrap heap soon.

    • monty61

      Indeed. The issue was never global warming. The issue the greens should have been going after was sustainability. We simply don’t have enough planets for developed countries to maintain their standard of living, let alone the rising economies to even approach matching them. Unless there’s some kind of global awakening – highly unlikely not least in the West – things will get ugly at some stage.

      • Bonkim

        going by history – conflict for scarce resources is always ugly and barbaric.

      • Major_Eyeswater

        Given the exponential population and economic growth we’ve seen in the last 100 years, please can you list the things we’ve run out of, to date?

        Not holding my breath. Resource panickers are economically illiterate.

  • swatnan

    The BRICs are coming. Its only right that the most populous countries should have the most influence on the direction we are going.

    • Rocksy

      If they were fit to lead, they would have been doing so.

    • Daniel Maris

      Brazil has enough problems to keep a billion social workers going for several centuries. Russia – as we can see – knows only the measure of might. India is pulling in several directions at once. China seems to want to take us back to a time where nations did indeed go to war with millions of casualties over little parcels of land.

      All of them are dirt poor in comparison with ourselves.

      We should encourage them to become more like us.

      • the viceroy’s gin

        They’re already like you, lad. They’re all socialists.

  • Rhoda Klapp8

    Is it me, or does this look like a pathetic attempt to establish an acronym and a meme for personal reasons of shoring up guru status? Isn’t it in fact just stupid. Every one of the economies mentioned has pros and cons of it’s own. Grouping them in an ad hoc manner and trying to make some sort of case to support common features is an obstacle to clear thought and analysis. By which I mean, Brazil isn’t China, the USA isn’t Japan.

    • HookesLaw

      You might just be right. For me I hve no interest in the idiot Ferguson says.

      He says for instance that Russia is an emerging economy – but the ‘Economist’ itself says — ‘A few examples illustrate the problems facing the Russian economy.
      Government revenues are likely to be squeezed in the coming years. Most people know that Russia is pretty dependent on natural resources. About half of government revenues come from oil and gas. That could well collapse’
      ‘Today, around 13% of Russia’s population is 65 or older. By 2050 that figure will rise to 23%. That means a whole lot of pension payments (and lower tax revenues as the working population shrinks). And an ageing society will be one that spends more on healthcare’
      Just to throw another example into the pot – ‘The Business Insider’ says — ‘Russia’s third-quarter growth rate fell well below expectations on Friday in a fresh blow to government hopes of avoiding the worst economic performance since the 2008-2009 global crisis.’

      http://www.businessinsider.com/russia-q3-gdp-2013-10#ixzz2uoQH4yW9

      And Brazil?
      Again amongst others ‘The Business Insider’ says — ‘Brazil’s Economic Slowdown And Protests Are Just The Beginning Of Its Problems’

      http://www.businessinsider.com/whats-the-matter-with-brazil-2013-7#ixzz2uoR5arVP

      In terms of Acronyms I quite like FIAT — Ferguson Is A Thicko

      • Makroon

        It wasn’t Ferguson who proposed Russia as one of the ‘BRICs’, it was Jim O’Neil. Between Ferguson and the Economist and the Businessinsider, I think I would plump for Ferguson. The modern Economist is just another comic with no credibility.
        The “JUUGs” acronym has the obvious benefit of getting right up Jean-Francois’s rather large nose !

    • DDuana

      +1

  • sarahsmith232

    Love old Niall Ferguson but isn’t he marking himself out as a bit of an old, slightly, well, a bit not with it really, sort with this writing? ‘Cause, one in the eye to the open-door lot – according to the New Scientist Japan’s GDP was the lowest among U.S/U.k/ France/Germany/Japan between 2001 – 2010. But when looking at Growth Per Capita the reverse is true, it’s Japan at the top with the U.S second to the bottom.
    It’s covered here –
    http://globalpublicsquare.blogs.cnn.com/2014/01/20/is-japans-aging-population-a-good-thing/
    And here –
    http://www.economist.com/node/10852462
    The usual statement about this reads – ‘GDP has become a meaningless measure’, it has. No two ways, lots of people are trotting this line out ’cause it has. So, if our Juugs are in need of a smaller fitting in the coming decade should that still be considered relevant? Surely it’s only going to prove as important as Japan’s relative GDP decline, so really isn’t?
    On a separate note, when, when, when is there going to be anyone on the Left that’s going to get a ….clue about immigration? How much more evidence (check the Uni’ College Report on this) do they need before they’ll accept that we don’t ‘need’ that level.

    • HookesLaw

      The left do not accept the need to get our own people off benefits. Thats the key to reducing immigration.

      • the viceroy’s gin

        …no, the key to reducing immigration is for you socialists to quit importing a flood of immigrants, thus reducing immigration.

        • dalai guevara

          All them empty buy to lets need tenants, tovarishch.
          Ireland gave up trying to fill theirs, Spain is in the process of bulldozing some, we in Britain are filling them with cheap imports, innit.
          You thought we didn’t know this was happening? Wahaha!

          • the viceroy’s gin

            …can any other of you socialist nutters translate this nutter’s gibberish?

            • dalai guevara

              Housing shortage!
              Where? in Britain?
              Wahahaha!

              • the viceroy’s gin

                …also, can any other of you socialist nutters keep up with this nutter’s pointless banter?

              • dmitri the impostor

                dalai son, stick to your day job of playing the spoons in an old people’s home

        • HookesLaw

          I am not a socialist. but everyone is a socialist in your bigoted mind who is not an Aryan and does not wear a white sheet over his head.
          Drag your slime back under its stone.

          • the viceroy’s gin

            No, not everybody is a socialist, but you definitely are, laddie.

      • sarahsmith232

        Right on the first sentence, second one is a bit out. Do you really think that a young male currently earning roughly around $2,000 to $3,000 per year in parts of the world like rural Pakistan and Nigeria would really give a **** about our current level of employment when considering whether to try for entry into this country? If they think they can get in, they’ll go for it, no matter what’s going on with the rate of unemployment.

    • Makroon

      Have you been drinking ?

      • sarahsmith232

        What luvie? Why is the post evidence of that? Top and bottom of it, GDP growth is not that greatly relevant anymore. Why are we supposed to still consider it relevant? The link between it’s expansion and prosperity has gone, check the Japan example of this. U.S expanded at a better clip yet their middle-classes didn’t enjoy a corresponding increase in standard of living, BTW, this was recognised pre the crash, so this fact was not crash created.
        So, ok, my understanding of I.R and economics is superficial, so then tell me, why am I supposed to see this as still relevant?

        • DDuana

          GDP is good for measuring national power. It is not as good a measure of people’s living standard, because of price differentials in different countries.

  • http://english-pensioner.blogspot.co.uk/ english_pensioner

    Rising countries continue to rise until the population discovers the fact that they are rising countries and demand a share of the wealth.

    • DDuana

      I like this.

  • Frank

    “My good friend Jim O’Neill of Goldman Sachs…” says it all.

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