New Delhi: Brics is passé. Civets (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) hasn’t really taken off. Now, Citigroup’s William Buiter and Ebrahim Rahbari have coined a new classification called 3G or Global Growth Generators in a report released on Wednesday.
They argue that:
The proposed change in terminology is necessary because it points to a different approach to thinking about the future drivers of growth and profitable investment opportunities anywhere in the world. It is necessary now because catchy acronyms and labels have spawned unhelpful taxonomies of countries that have become obstacles to clear thinking about future growth and profit opportunities. Developing/Emerging vs. developed/advanced/mature, Bric, the Next Eleven, the 7 Percent Club are no more helpful concepts for Citi’s global client base than the Magnificent Seven or the Nine Nazgûl.
Brics or 3G, India finds a place along with Bangladesh, China, Egypt, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam.
Buiter, a respected former Bank of England policy maker, and Rahbari write that this is a tag for
those countries, regions, cities, sectors, trade corridors, industries, firms, products or asset classes that we consider likely to thrive in our globally integrated economy, with high growth rates and high returns to investment during the coming decades.
And what does their crystal ball say?
China should overtake the US to become the largest economy in the world by 2020, then be overtaken by India by 2050.
But the growth is not going to come easy, they add. The usual laundry of list of problems in India finds it way into the report.
Infrastructure problems. Check.
Improve education. Check.
Allow FDI in more sectors.Check.
More trade liberalisation. Check.
Deregulate prices of water and fuel. Check.
Of course, if these conditions aren’t complied with, India could well be whacked out of the next new compilation.