Marching with BRIC

The BRIC countries (Brazil, Russia, India, China) are about to crash into the G-6 list, displacing France, U.K., Germany and Italy. According to a Goldman Sachs report prepared in 2003, called "Dreaming with BRIC's - the path to 2050", only Japan and the USA will remain in the top six economic powers by 2050. The ranking at that point, according to the report, will be

1. China
2. USA
3. India
4. Japan
5. Brazil
6. Russia

India is forecast to maintain the steadiest growth rate throughout this period. If the predictions are correct, India's GDP should outstrip that of Japan by around 2030. In the words of a recent article in "Accountancy" magazine, the journal of The Institute of Chartered Accountants in England & Wales "..India's the one to watch !"

Many aspects of the report have raised eyebrows. One is the prediction that Brazil will outrank Russia. Another is a forecast that the currencies of the BRIC countries will appreciate by 300% against the US Dollar by 2050 !

The currency outlook is one which requires careful scrutiny and is likely to be the main indicator that matters are progressing according to the Goldman Sachs projections. The Indian currency steadily declined against the dollar after Independence. Some of us remember that in the 1950s the Rupee was 7 to the dollar ! However, that trend may well have been reversed. In 2005 the Rupee declined to 49 to the dollar. Today it is around 40, an appreciation of 18% over two years. While the prediction of a 300% increase may sound unrealistic, it is worth recalling the history of another currency - the Japanese Yen. In the mid-1970s the Yen was app. 300 to the US Dollar. Today it stands at 120. So the analysts of Goldman Sachs may yet be proved correct.

Danger signals abound, though. The growing (and highly visible) disparity between the upwardly mobile urban middle class and the teeming masses mired in poverty, requires the most urgent attention on the part of India's social engineers. Even the Goldman Sachs report points to the risk that political and social instability could derail the Indian Express.

It's worth repeating the words of the late Archbishop Romero of El Salvador " What good are beautiful highways and airports, all these beautiful skyscrapers, if they are fashioned out of the clotted blood of the poor who will never enjoy them ? "