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Last Updated: Monday, 19 September 2005, 22:59 GMT 23:59 UK
The global change in economic power

Peter Day
Presenter, BBC Radio 4 and BBC World Service

Nike shop in Mumbai
A Nike shop in India
It is a long hop from a Goldman Sachs corner office with a stunning view towards St Paul's Cathedral in the City of London to a leaky squat along the road to the international airport in Mumbai, the slums where India's poor live.

But that is one of the many journeys I've been on in the past few months, as I've criss-crossed the world in pursuit of the idea of BRICs.

BRICs is an easily graspable thesis put forward by the investment bankers at Goldman Sachs a year or two ago.

It came from a team led by a man I've known for 25 years or so, Jim O'Neill, now Goldman's head of international economics and proprietor of the corner office in London.

He and his experts looked at the pace of growth in some big developing countries, and came to the conclusion that by 2050 (and probably much sooner) the BRICs countries - Brazil, Russia, India and China - will be up there at the top table of the world.

An exciting insight for international investors looking for homes for their money in developing markets.

Boom time

At current rates of growth, China's economy will become bigger than that of the US in 2041. And it will keep on growing, decade after decade, because it still will be much smaller in terms of gross domestic product per head of population.

And then there's India, which has a younger population than China and its one child families. Maybe India will outstrip China in population and growth terms.

China is leading global demand for oil and steel

Brazil and Russia are obviously more problematic, but they are huge suppliers of the raw materials, iron ore, soyabeans, and energy that the other two nations have such a huge hunger for.

The world of the BRICs is different from the one most of us have grown up with: different global leaders at the top tables, different brand names in our high streets, maybe even different ethics in our corporations.

We may see Adam Smith's invisible hand of capitalism shaking hands with Confucius, or Taoism, or Buddhism.

And there will be increasing pressure on world institutions such as the International Monetary Fund, the World Bank and the United Nations to give due representation to millions of people - almost half the world's population - that are represented by the rising BRICs nations.

Trade disputes are going to continue forever
Keith, US/UK

Nothing is certain however, and instead of dominant powerhouses it is possible that China, India, Brazil and Russia may end up like Japan: huge economic growth that is not accompanied by extended geopolitical power and influence.

Changing landscape

We are in fact already beginning to see the effects of the BRICs flexing their muscles - rapidly rising prices of steel, coal and other raw materials as demand increases from these developing nations.

China's influence in particular is all over the world map: courting Russia for guaranteed oil supplies, negotiating to finance a new railway line in Brazil for the swift transport of farm goods to the ports for export; setting up a door factory in Ghana to add local value to the wood it needs to build the mushrooming new Chinese cities.

Family living in Mumbai
India could be a future global super-power

But raw materials (and a rush of exported goods from the new Chinese factories) are just the first step.

This has been a significant year for globalisation and hackles have been rising.

There have been the Bra Wars in Europe; a scrappy end to 35 years of the Multi Fibre Arrangement, which was supposed to have given rich Western countries enough time to get used to cut price competition but ended with clothes piling up at ports and on borders.

In America, alarm bells were sounded by Chinese attempts to buy a US oil company and the Maytag washing machine brand.

New dawn?

The fighting has been fierce, though the blows are just the beginning of a shift in business power that will stretch on into the 21st century.

When IBM's personal computer business is taken over by the Chinese Lenovo corporation, BRICs are clearly on the march.

And despite the political fuss about these embryonic moves, in general, there is something strangely quiet about the American response.

Perhaps it is dangerously unpatriotic even to imagine the current international top dog being toppled from its pre-eminent position.

Perhaps the Americans don't believe it will happen.

Work in Progress is the title of this new exploration of the big trends upheaving the world of work as we steam further into the twenty-first century; and it is a work in progress, influenced and defined by my encounters as I report on trends in business and organisations all over the world.


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